Joachim Straehle

Q. Has CSPB gained many new Middle East clients from the US banks? If so, is this due to the political situation, or the downturn in US equities?

A. It is bad that people with Arab names have been targeted for discrimination in some countries, and the lawsuits in the United States combined with the threat of war with Iraq does seem to be causing an outflow of money.

We do see Asia-Pacific and the Middle East as two growth areas at the moment. But we can not really tell whether the funds invested with us by Middle East clients are from the United States. We certainly 'believe' money has been flowing back into the countries of the region for investment locally.

Q. Can you reassure clients of your long term commitment to the region?

A. Absolutely. That is one of my main reasons for being here today. Without the Middle East we would not have a private banking division. We are here in U.A.E. for the long term and see Dubai as our regional hub.

Q. Do you have any plans to grow your base in Dubai? Would you consider moving your Singapore operations to the Dubai International Financial Centre?

A. We certainly do have plans for growth, and we met with the DIFC authorities today. As a bank we will have to wait and see what exactly the DIFC comes up with.

I would rather build a network of centres to serve our clients, but we could also serve Asian clients from Dubai. It all depends on what form the DIFC takes, and the regulatory structure they chose to adopt, and how capital intensive they decide to be. For us privacy and stability are the two most important things as private bankers.

However, the DIFC is well positioned for any opportunities in the Saudi market that may emerge in the process of World Trade Organization membership. The WTO could fundamentally change the opportunities for financial services in Saudi Arabia, and we would want to take part in any opening of this vast market to international firms.

Q. How do you think the current international political situation will influence the development of financial services in the region?

A. This will depend on the impact of the war in Iraq, if it happens, and how fast it might be and what develops from it. We are neutral and if people want to put money in a safe place then we could benefit. Then again in a peace settlement it might be that clients would bring money back to invest locally.

Q. Where do you believe investors will put their money over the next few years? Are Western equities facing a Japanese style decade of decline?

The impact of a war on Western financial markets would also be significant. Indeed war and profit warnings are already having an impact on the markets. It is difficult to see a trend, and there are still far too many negative factors.

My view is that we need more positive news for a recovery, and that any positive news will be greeted by profit taking. So this will not be a fast recovery. It may take five years like in the 1970s. This is partly down to globalization and the linking of financial markets.

Today you need to be either very short term in your investments and watch them closely, or seek alternative investment strategies that work when markets go up or down. Or you can just stay out of the markets and wait for opportunities. We also see a lot of interest in capital protected products.

Real estate is another option. But you have to watch out for investment bubbles here too. Personally I favor good locations where you can never go far wrong. With real estate it is always, location, location, location.

Q. Given that the oil sector is booming and the gas sector is set for major expansion over the next few years, how optimistic are you about the outlook for the regional economy?

A. I suppose gas investment will go up if the oil price stays high, and a war in Iraq would tend to support high oil prices along with Opec's stand on prices. Then gas will find its true value and benefit the region. Certainly the developments in Qatar have been very impressive and other nations are following this example.

Q. Can you comment on the recent management changes at Credit Suisse and how they have been received?

A. The new top management has the experience to steer the group through difficult markets, and the changes have been positively received. There are issues that have now been addressed, and Credit Suisse has been and is a great bank that will perform well in the future.