June 11, 2012
ZURICH - Swiss financial institutions are starting to think about which foreign clients are worth keeping – and which ones aren't.
If clients aren't rich enough, or the potential number of clients in a certain country is too small, it may not be worthwhile for banks to keep them on. Switzerland has signed agreements with Germany, Great Britain and Austria to levy taxes on undeclared assets held in its banks as well as a withholding tax on future client income. These new rules could cost banks as much as $518 million according to the Swiss Bankers Association (SBVg).
As a consequence of the agreements signed with Germany, Britain and Austria, which will come into effect in 2013, many foreign clients may find themselves being shown the door by their bank. According to Sindy Schmiegel of the SBVg, in the run-up to 2013, "it is up to each bank to design their own business strategy – deciding on concentrating on certain groups of clients, numbers of clients, or specializing in specific areas of business."
None of the institutions approached by Tages-Anzeiger wished to openly confirm that they were in fact weeding out clients. The Zürcher Kantonalbank (ZKB) said that it "couldn't generalize;" markets were being looked at individually. "But for certain customers it could mean ending the business relationship," said ZKB spokesman Thomas Pfenninger. A client's degree of wealth might be a determining factor; whether or not the client hails from a national market that is strategically relevant to the bank also matters.
Swiss Postfinance is expected to release a statement in the coming weeks announcing how it plans to deal with customers concerned. For now the general operative rule is that existing clients will be offered a choice either to disclose the existence of their Swiss accounts and assets to tax authorities in their country or to pay a withholding tax in their country of residence. The second option preserves client anonymity.
It is cheaper for institutions if clients disclose the existence of the account and the assets to tax authorities in their own country. Will other Swiss banks, such as Bank Sarasin, wind down the accounts of customers who don't wish to follow this route by year's end? "We have yet to make a final decision," said the bank's spokesman Benedikt Gratzl, but "will take all necessary relevant steps beforehand."
Good news for UBS and Credit Suisse
The crucial questions for each bank are: Should the customers be phased out now, or by the end of the year? What is cheaper for the banks? Should clients be told the disclosure option is the only one they have as far as the bank is concerned and that their account will be closed if they don't opt for disclosure?
The Swiss Bankers Association's Schmiegel says: "For banks that have only a few customers in these three countries, it doesn't make any sense to implement an involved solution for just these few customers."
The entire transition is cause for some disquiet on the Swiss financial scene, say market observers. Smaller asset managers could potentially stop some gaps by focusing on bumped clients and offering them a viable solution. Some institutions might even start specializing in clients from specific regions and jurisdictions.
The transition could lead to clients moving their accounts to big banks UBS and Credit Suisse, who have the wherewithal -- not only the money but also the necessary structures -- to switch over to the Swiss government's new white money strategy. But UBS speaker Dominique Gerster wasn't giving anything away other than: "We are preparing for the withholding tax."
Insiders are counting on clients who left UBS en masse for regional banks in 2009 (after it was threatened with bankruptcy and had to be rescued by the government) making a return to UBS and Credit Suisse. UBS speaker Gerster had no comment on this either, and Credit Suisse remained silent on the matter.
A lot of money is involved. The Boston Consulting Group estimates the assets that could leave Switzerland by 2014 at around $257 billion.
Read the original article in German
Photo - Emerald Ann Bonzi
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In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.
October 20, 2021
SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.
What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?
But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.
An appetite for gentrification
I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.
In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.
This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.
Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.
Informal street vendors are casualties.
A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.
On paper, this all sounds great.
But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.
This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.
In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.
A call for food justice
Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.
Food, it seems, has become the perfect lure.
It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.
In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.
Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.
Upending an existing foodscape
In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.
San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.
Longtime residents find themselves forced to compete against the "urban food machine"
But that doesn't mean objections don't exist.
Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.
All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.
So what happens when new competitors come to town?
Starting at a disadvantage
As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.
My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"
San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.
When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.
Going up against the urban food machine
Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.
I argue that investors and developers use food as a tool for achieving the same ends.
When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.
Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.
It's hard to see how that's a form of inclusion or empowerment.
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