The fund is reviewing its executive ranks, recruiting senior professionals and reorganising parts of its portfolio, according to people familiar with the matter cited by Bloomberg.

L’imad has been working with the Boston Consulting Group on the recruitment process and has asked some executives transferred from Abu Dhabi Developmental Holding Group, better known as ADQ, to reapply for their positions.

The changes come only months after Abu Dhabi consolidated ADQ’s assets under L’imad, creating a sovereign investment platform spanning infrastructure, energy, healthcare, aviation, ports, financial services, technology and industrial assets.

The Emirate aims to establish a diversified sovereign investment powerhouse through the restructuring.

At the centre of the new structure is Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, who was appointed chairman of L’imad in January.

Jassem Al Zaabi, chairman of Abu Dhabi’s Department of Finance and vice-chairman of the UAE Central Bank, was appointed managing director and group chief executive.

The changes give L’imad a potentially important position within Abu Dhabi’s already formidable sovereign investment ecosystem, alongside the Abu Dhabi Investment Authority and Mubadala Investment Company.

From ADQ to L’imad
The creation of L’imad represents one of the most significant reorganisations of Abu Dhabi’s state investment architecture in years.

ADQ, established in 2018, had accumulated more than USD 263 billion in assets before its consolidation into L’imad.

Its holdings included strategic companies across energy, infrastructure, healthcare, food, transport and financial services.

Under the new structure, L’imad’s portfolio encompasses 25 investment companies and platforms and more than 250 subsidiaries, including TAQA, Modon Properties, Etihad Airways, PureHealth, Etihad Rail, Wio Bank, Abu Dhabi Ports, McLaren and Louis Dreyfus.

The stated objective is not simply to hold these assets but to manage them more actively.

In July, Sheikh Khaled approved L’imad’s investment and operational framework, covering energy and utilities, urban development, ports and logistics, aviation, industrial businesses and alternative investments.

The fund said the framework would diversify income streams and improve returns over the medium and long term. Al Zaabi described L’imad’s model as an “operationally active shareholder” approach, in which the fund works directly with portfolio companies rather than functioning solely as a passive investor.

That approach could make the fund an increasingly significant participant in large corporate transactions, infrastructure projects and strategic investments.

Dealmaking is already under way
L’imad has moved quickly since its formation.

It acquired a 42.54% stake in Abu Dhabi real estate company Modon Holding from International Holding Company last year.

The fund was also involved in the consortium that pursued Paramount’s proposed acquisition of Warner Bros Discovery alongside Saudi Arabia’s Public Investment Fund and Qatar Investment Authority.

Its investment programme has since expanded to include infrastructure projects.

In May, L’imad joined BlackRock’s Global Infrastructure Partners, Singapore’s Temasek and ADNOC in a partnership targeting USD 30 billion of investment across the Gulf, Central Asia and selected markets in the wider Middle East and North Africa.

The partnership will use a combination of equity and debt to invest in greenfield and brownfield projects, particularly in energy, transportation and logistics.

The initiative illustrates the type of transactions L’imad is positioning itself to pursue: large-scale projects where Abu Dhabi’s capital can be combined with international financial and operating expertise.

L’imad has also taken greater control of existing domestic assets. In June, it acquired 2PointZero’s stake in TAQA, a transaction that is expected to give L’imad ownership of about 98.12% of the power and water utility once approvals are completed.

In August, the fund announced its intention to acquire the remaining shares of AD Ports Group, further consolidating strategic infrastructure assets under its umbrella.

A broader role for sovereign capital
The restructuring is taking place against a broader expansion of Abu Dhabi’s use of sovereign capital.

The emirate oversees several of the world’s largest pools of state investment money. ADIA alone was estimated by Global SWF to have about USD 1.187 trillion in assets in 2025, while Mubadala reported assets of USD 385 billion at the end of that year.

The consolidation of ADQ into L’imad, therefore, does not create a new pool of USD 300 billion from scratch. Rather, it reorganises a substantial existing portfolio under a new institutional structure and leadership.

That distinction is important to understanding L’imad’s role.

Where ADIA has traditionally operated as a globally diversified investment institution and Mubadala has focused heavily on diversification and strategic investments, L’imad’s emerging mandate appears particularly connected to operating companies, domestic economic development and strategic sectors.

The fund’s portfolio framework explicitly covers industries that Abu Dhabi regards as critical to its economic transformation, including energy, logistics, aviation, technology and advanced industry.

Leadership reset
The executive restructuring also aims to establish a distinct institutional identity instead of merely renaming ADQ’s existing organisation.

Bloomberg reported that L’imad is reassessing roles and recruiting senior talent, with some former ADQ executives required to compete for positions they previously held.

The move could help determine how the fund balances two potentially competing priorities: operating a giant portfolio of domestic strategic companies while simultaneously deploying capital internationally.

The appointment of Sheikh Khaled as chairman also places L’imad directly within the emirate’s senior economic leadership structure. Its board includes figures such as Mubadala managing director Khaldoon Al Mubarak, reinforcing links between Abu Dhabi’s major investment institutions.

The fund is consequently emerging at a time when Abu Dhabi is seeking to increase the global reach of its capital while using state-backed investment to accelerate economic diversification at home.

For L’imad, the immediate task is to turn the consolidation of more than $260 billion of inherited ADQ assets into a coherent investment platform.

Its growing involvement in infrastructure partnerships, utilities, ports and international transactions suggests that the new fund is being positioned for an active role in that process.

The next phase will reveal whether L’imad becomes primarily an operating shareholder of Abu Dhabi’s strategic companies, a global dealmaker, or a combination of both.

For now, the restructuring of its leadership and portfolio indicates that Abu Dhabi is building an institution designed to do more than simply manage assets: it is positioning a large pool of sovereign capital as an instrument for both domestic economic development and international investment.

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Cross-border wealth refers to money that individuals or families hold in a country other than the one they live in. Think of a wealthy Indonesian family keeping investments in Singapore, or a European entrepreneur holding assets in Zurich. These arrangements are entirely legal and extremely common among the rich, and the city that attracts the most of this money earns enormous advantages, such as jobs, fees, taxes, real estate demand, and influence.

In 2025, Hong Kong booked USD 2.95 trillion in such assets, narrowly surpassing Switzerland’s USD 2.94 trillion. Executive Partners Analysis put the moment in perspective in May 2026: “Hong Kong now books $2.95 trillion in cross-border private wealth. Switzerland books $2.94 trillion. The margin is $10 billion on a base of nearly $3 trillion, which is to say the margin is almost nothing. But the direction is everything. This reversal is unlikely to be undone.”

The Rise of the East in a World of Abundance

The backdrop to Hong Kong’s rise is a year of spectacular global wealth growth. Total global financial wealth rose by 10.7% in 2025 to reach USD 333 trillion, the fastest expansion since 2021. If you include physical assets like property and land, total global net wealth approaches $550 trillion. Much of this growth was driven by surging stock markets, which rose 13.2% globally on average. Gold was a particular standout, jumping roughly 44% in the year, as central banks and retail investors alike rushed to buy the commodity amid concerns about the long-term stability of major currencies.

This wealth is not spreading evenly. Globally, cross-border assets grew by 8.4% to USD 15.7 trillion, but nearly 90% of all new offshore money flowed into just 10 booking centres. The result is a world increasingly divided into two gravitational poles: an Eastern Hub, anchored by Hong Kong and Singapore, pulling in wealth from mainland China, India, and Southeast Asia, and a Western Hub, dominated by Switzerland, the United States, and the United Kingdom, serving European, Middle Eastern, and Latin American clients.

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Hong Kong now sits atop both of these poles, and analysts project it will continue growing at around 9% per year through 2030. As BCG’s 2026 Global Wealth Report Stated: “Hong Kong is cementing its role as China’s gateway to global markets, though that same concentration ties its trajectory tightly to economic and regulatory developments on the mainland.”

The China Connection

The single biggest reason for Hong Kong’s ascendancy is its relationship with mainland China. More than 60% of the assets booked in Hong Kong come from mainland Chinese clients. This is the product of a deliberate policy architecture designed to channel mainland wealth through Hong Kong’s internationally trusted financial system.

The centrepiece of this architecture is the Cross-boundary Wealth Management Connect, commonly called the WMC, a scheme that allows residents of the Greater Bay Area, the cluster of cities in southern China that includes Shenzhen and Guangzhou alongside Hong Kong, to invest in financial products on either side of the border. When it was upgraded in early 2024, the scheme raised individual investment quotas and allowed a wider range of products and participants. By April 2025, over 154,000 individual investors from the Greater Bay Area were using it, and they had moved more than RMB 112 billion across the border. The number of eligible investment funds available to mainland investors through the scheme grew from around 160 at the end of 2023 to 358 by March 2025.

The impact on Hong Kong’s banking and investment industry has been dramatic. Between 2022 and 2024, investment transaction volumes at retail banks more than doubled, from HKD 819 billion to HKD 1.774 trillion. In private banking, which serves the very wealthy, volumes grew from HKD 2.975 trillion to HKD 4.466 trillion over the same period. Total assets under management in Hong Kong grew by 13% in 2024 to reach HKD 35 trillion.

Private banks expanded their office space by between 35% and 50% to handle the surge. By mid-2025, a streamlined onboarding process for wealthy clients at seven private banks had already processed transactions exceeding HKD 70 billion, with 13 more banks preparing to join the system.

Inviting the Ultra-Wealthy Home

Managing money is one thing. Getting the people who own it to move there is another. Hong Kong has been pursuing both strategies simultaneously. Paul Chan, the Financial Secretary of the Hong Kong Special Administrative Region, described the underlying logic plainly, “Leveraging the advantages of ‘one country, two systems’, complemented by free, open, transparent, and predictable economic policies as well as a stable and secure investment environment, and cross-market connectivity, Hong Kong is attracting more and more ultra-high-net-worth individuals and family offices.”

In March 2024, the government launched the New Capital Investment Entrant Scheme, a residency programme that allows wealthy foreigners to obtain the right to live in Hong Kong in exchange for a minimum investment of HKD 30 million, roughly USD 3.85 million. Of that amount, HKD 27 million must go into approved financial assets or real estate, and HKD 3 million must be placed into a government-run strategic investment fund that deploys capital into local technology, artificial intelligence, biotechnology, and sustainable industries.

By the end of February 2026, the scheme had received 3,166 applications and was on track to bring in approximately HKD 95 billion in new capital. Of those applicants who have completed their investments and received approval, most put their money into mutual funds and listed equities. The tax incentives driving these decisions are significant. Hong Kong levies no capital gains tax, no inheritance tax, no wealth tax, and no value-added tax. Income tax on locally earned salaries tops out at 17%, which is extremely low by international standards.

These conditions have made Hong Kong a magnet for family offices, which are private companies set up by very wealthy families to manage their investments and financial affairs across generations. By the end of 2025, there were over 3,380 single family offices operating in Hong Kong, a 25% increase in just two years. The government had set a target of facilitating 200 new family offices and hit it ahead of schedule, with a new target of 220 additional offices set for 2026.

The Succession Reckoning

Underlying the family office boom is a generational pressure that rarely makes headlines but is reshaping the entire wealth management industry. Decades of rapid wealth creation across East and Southeast Asia have produced a high concentration of first-generation fortunes. In Singapore, Malaysia, and Indonesia, between 40% and 50% of major family enterprises are still run by their founders, with the median age of leadership above 70. These families are now confronting what happens next.

Michael Kahlich, Managing Director and Partner at Boston Consulting Group, framed the scale of the challenge in the 2026 Global Wealth Report, “Families are increasingly confronting succession as a design challenge rather than a single transfer event. The firms that can help clients navigate governance, inter-generational alignment, and long-term wealth structures will define the next era of wealth management in Asia.”

The complexity is real. Modern family fortunes span multiple asset classes and multiple jurisdictions. Younger family members are often dispersed globally, pursuing careers outside the founding business, and may have very different views on what to do with inherited wealth. Many prefer venture capital or sustainable investments over running a traditional manufacturing operation. Equal distribution among heirs can fragment ownership and dilute control. The wealth managers and private banks best positioned to win in Hong Kong are no longer simply those offering access to products, but those capable of designing governance frameworks that can hold a family’s financial interests together across borders and generations.

The Stock Market Revival

If the wealth management business is one engine of Hong Kong’s comeback, its stock exchange is the other. In 2025, Hong Kong reclaimed its position as the world’s top initial public offering, or IPO, venue.

An IPO is when a private company sells shares to the public for the first time, raising capital in the process. Hong Kong raised USD 37.4 billion across 119 listings in 2025, a 231% increase on the year before, exceeding the combined total of the previous three years.

The momentum continued into early 2026, with 40 companies completing IPOs in the first quarter alone, raising the equivalent of around USD 13.3 billion, a 489% year-on-year increase and the strongest quarterly performance in five years.

BCG’s Michael Kahlich observed that the physical aggregation of capital and companies is now forcing even European institutions to relocate: “What ultimately matters is client proximity. Two major wealth-management clusters are emerging globally. Singapore and Hong Kong serving Asia, and Switzerland, the UK, and the US serving Western markets. Swiss banks have responded by expanding operations heavily in major Asian hubs.”

The dominant story driving Hong Kong’s IPO revival is China’s artificial intelligence boom. While technology listings in the United States have struggled, with companies going public at high valuations and then performing poorly, Chinese AI and technology companies have found Hong Kong to be a more receptive and practical venue.

More than 85% of Chinese AI-related companies that went public through early 2026 chose Hong Kong. This is partly because of a specialised regulatory framework called Chapter 18C, which allows innovative technology companies in areas like AI, semiconductors, autonomous vehicles, and robotics to list even if they have not yet generated significant revenue. The bet is on future potential rather than current profitability.

Leading Chinese AI companies that listed have seen post-listing share price gains exceeding 400%. More than 500 companies are now waiting to list, most of them mainland Chinese firms specialising in advanced manufacturing and technology.

Not Everything is Booming

For all the financial energy flowing through its banking towers, Hong Kong’s recovery is uneven on the street level.

Tourist numbers are healthy. Visitor arrivals rose 12% in 2025 to nearly 50 million people, with mainland Chinese visitors accounting for roughly three-quarters of the total. But tourist spending is another story. Total international visitor spending in 2025 remained 15% below the level seen in 2018, before the social unrest and pandemic that scarred the city’s reputation. In contrast, regional rivals Singapore and Macao have both exceeded their pre-pandemic spending levels.

Modern mainland tourists tend to be savvy, cost-conscious travellers who use their phones to compare prices and seek out cultural experiences rather than splashing out on designer goods. Hong Kong’s currency, pegged to the US dollar, makes it expensive relative to other regional destinations. Broad retail sales fell by 5.5% in the first five months of 2025, and hotel room rates have softened despite near-full occupancy.

The government has responded with investment, earmarking HKD 1.6 billion for tourism in its 2026-27 budget, and launching promotional campaigns in new markets including India, Southeast Asia, and the Middle East. Luxury goods showed some resilience, with jewellery and watch sales jumping 20% in April 2026, but the broader consumer economy remains two-speed.

The Shadow Over the Success Story

The most difficult question hanging over Hong Kong’s financial renaissance is whether the institutional framework that makes it valuable can survive the political pressures bearing down on it.

Hong Kong’s unique appeal has always rested on a single foundation: ‘one country, two systems’, the arrangement under which it operates a common legal system, free capital flows, and independent courts, even as it is politically a part of China. International investors, wealthy families, and global banks trust Hong Kong precisely because it offers Chinese proximity combined with Western legal protections. That combination is increasingly under strain.

The enactment of Article 23, a sweeping national security law, in March 2024, followed by updated implementing rules in March 2026, has substantially expanded the legal risks of operating in Hong Kong. The law defines state secrets very broadly, potentially covering information about economic conditions, government policy decisions, and technological developments.

For financial firms, this creates practical uncertainty. Routine business activities, such as conducting due diligence on a Chinese company, auditing assets, or analysing markets, could potentially be characterised as illegal intelligence collection if they touch on sensitive topics.

Foreign consulting and investigation firms have already faced enforcement actions on the mainland under similar laws. A Q2 2026 geopolitical risk assessment captured the essential tension: “The question for the rest of the decade is whether the territory can manage what analysts are calling its security paradox. Can Hong Kong continue to present itself as a globally trusted, transparent financial centre while operating under a tightening legal and political environment.”

Political life has also narrowed. The Democratic Party, Hong Kong’s oldest pro-democracy political organisation, dissolved in late 2025 following financial difficulties and warnings from security authorities.

Where Does This Leave Global Wealth?

Switzerland is not finished. Its greatest strategic advantage is diversity. It draws clients from many different continents and continues to attract money from volatile regions like the Middle East whenever geopolitical tensions flare. It is nobody’s sole focus, which makes it resilient. The United Arab Emirates is also advancing rapidly, recording 11.1% growth in cross-border wealth in 2025 to reach USD 721 billion, as it positions itself as a bridge for wealth owners who want to move assets out of traditional Western centres without losing access to global markets.

But for now, the top spot belongs to Hong Kong. Its GDP grew by 5.9% in the first quarter of 2026, the 13th consecutive quarter of expansion and the strongest rate in nearly five years. The financial machinery is functioning at peak capacity. If the territory can preserve its common law framework and operational transparency while continuing to deepen its integration with the Greater Bay Area, its position at the top of global wealth management looks durable. If the two impulses pull too far apart and international capital begins to feel the friction, the current moment could look, in hindsight, like a high-water mark.

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As per the findings of the “Global Fintech Report 2026: From Recovery to Resurgence,” the fourth edition of the annual report coauthored by Boston Consulting Group (BCG) and FT Partners, fintech now accounts for approximately 4% of the total global financial services revenue pool, large enough to be considered a distinct, mature sector but with vast white space remaining.

“The sector’s rebound is not driven by cheap capital or speculative optimism, but by operating performance. Exit markets have followed: fintech IPOs rose 50% year over year to 42 deals, while M&A volumes accelerated sharply, from USD 105 billion in 2023 to USD 184 billion in 2024 and USD 251 billion in 2025,” the study commented.

“Artificial intelligence (AI) is also reshaping how the sector competes: BCG data shows fintechs that are using AI effectively are achieving up to five times greater developer productivity, with the strongest near-term gains coming in engineering, underwriting, compliance, and customer support. These are areas where workflow redesign, rather than tool adoption alone, is driving the difference,” it added further.

“Fintech has not simply bounced back from the reset years; it has come out the other side as a fundamentally more mature industry. The firms leading today are profitable, disciplined, and expanding into new products and geographies with a seriousness that was not always present in the boom years. The question now is how far they will go in reshaping financial services,” said Inderpreet Batra, Managing Director and Senior Partner and Global Leader of BCG’s Payments & Fintech business, and coauthor of the report.

As per the report, there is a narrowing gap between how banks and fintechs are regulated. In the United States, the United Kingdom, and the European Union (EU), charter and licensing pathways are becoming more accessible, although they still require a great deal of compliance overhead.

In 2025, major fintechs applied for US federal bank charters in growing numbers, seeking the benefits of lower funding costs, greater product control, and direct ownership of the customer relationship.

“For the first time on record outside of 2023, scaled fintechs out-acquired banks and incumbent buyers, completing 659 deals in 2025 versus 589 by incumbents. Despite public market volatility, the strategic pressure to transact remains high, and M&A is becoming a primary tool for capability-building in AI, digital assets, and compliance, areas where the competitive gap is widening and building organically is too slow,” the report remarked.

On the neobank front, leading players are no longer focused narrowly on payments or low-friction onboarding. Instead, they are diversifying into lending, investing, insurance, cross-border transfers, and mass-affluent wealth management, evolving from single-product disruptors into broader financial platforms that, in the words of Batra, “present a sharpening competitive threat to incumbents.”

“Consumer credit is a key frontier. Unsecured lending is one of the largest global white spaces for neobanks, deepening customer relationships while leveraging alternative underwriting models. In Europe, leading neobanks have expanded wealth and trading offerings and moved into mortgage products, while in Latin America, the trend is toward broader credit and personal loan portfolios across multiple markets,” he said.

However, neobanks are facing a different challenge in the United States, with the market in the world’s largest economy already being crowded with trusted incumbents and scaled domestic fintechs.

Also, digital acquisition costs are high, while the regulatory environment remains fragmented, and last but not least, the population is highly banked.

As per BCG and FT Partners, international neobank entrants are likely to find selective and niche success in the United States rather than broad-based disruption. Domestic American fintechs are already preparing for intensified competition by moving upmarket.

“A real divide is emerging between FinTech companies that have made AI foundational—embedded across finance, accounting, customer service, fraud, and every other function—and those still using it for coding help and a handful of disconnected workflows. Large, established companies are pouring capital into AI, but capital alone hasn’t produced breakout capability. The difference comes down to management, engineering talent, and the drive to actually rewire the organization. That’s what will separate the winners from everyone else over the next few years,” said Steve McLaughlin, CEO and managing partner at FT Partners and coauthor of the report.

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As per Boston Consulting Group, Hong Kong’s latest achievement will go unchallenged, as hubs in Asia are quickly emerging as new investment destinations for the HNWIs (High-Net-Worth Individuals), compared to the legacy European safe havens.

“Wealth from China and an IPO boom in 2025 helped Hong Kong rise to a USD 2.95 trillion offshore behemoth for the world’s rich, narrowly surpassing Switzerland’s USD 2.94 trillion in cross-border wealth. Hong Kong is cementing its role as China’s gateway to global markets, though that same concentration ties its trajectory tightly to economic and regulatory developments on the mainland,” stated BCG’s 2026 Global Wealth ⁠Report.

BCG sees both Hong Kong and Singapore consolidating their positions in the rankings of cross-border booking centres through an annual growth ratio of nearly 9% till 2030, compared to an expected 6% average in Switzerland over the same period.

“Cross-border wealth globally grew 8.4% to USD 15.7 trillion in 2025, driven by strong markets and more demand for geographical diversification, and it flowed overwhelmingly to the world’s top 10 booking centres, further boosting concentration,” ‌BCG ⁠added.

“Despite slower growth rates, Switzerland’s diversification may prove an advantage as it draws clients from all regions, while the Asian hubs largely depend on growth in China. Geopolitical uncertainty reaffirms Switzerland’s role as a core global booking centre, attracting flight-to-safety flows from more volatile regions such as the ⁠Middle East,” the report observed.

The BCG report also coincides with a similar scoop from Reuters that, quoting bankers and financial advisers, talked about wealthy individuals looking to shift assets from the Gulf region to Switzerland in the wake of the ongoing Iran war.

“What ultimately matters is client proximity,” ⁠said Michael Kahlich, who co-authored the BCG report, adding that two hubs are forming globally – Singapore and Hong Kong for Asia, and Switzerland, the United Kingdom, and the United States for the Western ⁠region.

“As being close to clients has become more important, Swiss banks have expanded to other major hubs,” Kahlich added. ” UBS (UBSG.S), opens new tab, is number one in wealth management in both Singapore and Hong Kong,” he said.

Talking about Hong Kong’s economic growth, the GDP ‌expanded 5.9% in Q1 2026, while completing the historic feat of achieving the 13th consecutive growth quarter. The Q1 data was also the strongest quarterly rate in nearly five years. Authorities in the Chinese special administrative region now expect the GDP growth to stay between 2.5% and 3.5% for 2026 after 3.5% growth for 2025.

“Looking ahead, Hong Kong’s economic growth outlook remains ⁠positive, underpinned by strong global demand for artificial intelligence-related electronics, sustained growth in visitor arrivals and robust cross-boundary financial activities. However, tensions in the Middle East pose downside risks,” a government spokesman said.

The Q1 2026 GDP growth was also the fastest since Q2 2021, when the economy grew 7.6%. On a seasonally adjusted quarterly basis, the economy expanded 2.9% in January-March, compared with ‌1.0% ⁠growth in October-December.

“The rapid global development of artificial intelligence (AI) has driven strong demand for related products and electronics across the board, which has, to some extent, mitigated the potential impact of geopolitical tensions on local exports and the economy,” Financial Secretary Paul Chan commented, while analysing the numbers.

“Facing a complex and ever-changing ⁠external environment, Hong Kong’s economy is moving forward by enhancing quality and increasing scale,” Chan said, adding that deepening AI applications across sectors and strengthening talent development are among the priorities for the administrative region’s authorities.

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According to Boston Consulting Group, regulators and policymakers might address the issue by setting carbon pricing that accurately reflects the cost of greenhouse gases and is in line with global carbon price levels.

According to a recent consultant assessment, additional financial and non-financial incentives should exist to assist decarbonization and create environmental and business policies that support climate goals.

According to the report, green bonds in the region increased by 38% between 2016 and 2020, and in 2020 alone, Middle Eastern governments were responsible for 97% of green bonds, up from 13% four years earlier.

First, funding non-bankable green projects with lower risk-adjusted returns or more considerable investment risks should be made. Examples of such projects include assisting the research and development of cutting-edge technologies like renewable energy and carbon capture, utilization, and storage (CCUS).

The second is increasing the risk-adjusted returns of private capital investments in green projects using various risk mitigation tools.

The third suggestion was to use knowledge to support and counsel policymakers and regulators on the changes required to scale up climate finance.

According to Aytech Pseunokov, project head at Boston Consulting Group, banks in the area need to assess the risk of switching to cleaner energies in their portfolios and prepare for the future.

He predicted that banks and financial institutions would eventually become the primary funding source for the climate transition as climate finance regulations are implemented and green initiatives become more bankable.

“Up to that point, Middle Eastern banks would profit from assessing the effect of transition risk on their portfolios and putting themselves in the best position for the future by announcing portfolio emissions reduction targets and joining international alliances to share best practices. Doing nothing is a far riskier alternative since it keeps their portfolios’ exposure to the effects of climate change growing,” he observed.

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November 18, 2013 : Switzerland, the world’s largest centre for cross border wealth management, retained the top spot in a financial secrecy index by the Tax Justice Network (TJN), a London based campaign group. The country continued to be ranked No.1, even after being targeted by the U.S. to divulge tax details of tax evaders. It has also signed more than 40 bilateral agreements on tax information administrative assistance, the TJN reported.

Luxembourg, Hong Kong the Cayman Islands and Singapore trailed Switzerland in the benchmark, which is published once in two years. The U.S. which topped the index in 2009, is placed sixth in the study of 82 jurisdictions.

The ranking is based on a combination of a country’s secrecy score and a scale weighing based on their share of the global market for offshore financial services. Thus, for instance, even though Mauritius had a secrecy score of 80 – it was ranked lower at 19, against Singapore which had a lower secrecy score of 70 points but was ranked at fifth position, as it accounted for less than 1 percent of the global market share for offshore financial services.

An estimated $ 21 trillion to $ 31 trillion of private financial wealth is located in untaxed or sparsely taxed secrecy jurisdictions, according to the Tax Justice Network. The index ranks those jurisdictions based on bank secrecy rules and the share of the global market for offshore financial services, using reports by governments and the Organisation for Economic Co-operation and Development (OECD) and surveys of financial ministries. In 2009, Switzerland agreed to implement the Paris based OECD standards for tax information exchange. In 2012, its private cross border financial assets rose to $ 2.2 trillion and it is the largest cross border private wealth centre, Boston Consulting Group said in a report in May. The total assets under management at Swiss banks increased by 320 billion francs ( $347 billion) to 5.6 trillion francs, with the proportion of foreign assets unchanged at just over 50 percent in 2012, according to a separate study published in September by the Basel – based Swiss bankers association.

Tax matters still unresolved ?

The country is making efforts to improve its transparency by signing a mutual accord with the European Union on tax matters in October and said it’s adopting a negotiating mandate to revise EU rules on the taxation of cross border savings. The government also agreed this year to discuss a new system of automatic exchange of information with other authorities and supported U.S. demands for a voluntary disclosure initiative for Swiss banks to give up information on undeclared American clients. The U.S. Department of Justice is investigating 14 banks, including Credit Suisse Group AG, (CSGN), Julius Baer Group Limited and HSBC Holdings Plc, for allegedly helping Americans hide money from the Internal Revenue Services (IRS).

What is the TJN?

TJN is an independent organisation launched in the British houses of parliament in March 2003. The organisation is dedicated to high level research, analysis and advocacy in the field of tax and regulation. The organisation explains the harmful effects of tax evasion, tax avoidance, tax competition and tax havens. Its network includes eminent academicians, economists, financial professionals, journalists, lawyers, public interest groups and trade unions.  TJN uses 15 indicators for computing the secrecy scores which include banking secrecy, disclosure of company ownership, maintenance of records of local trusts and foundations, exchange of information and anti money laundering legislations, etc.

Tough for Bankers

Switzerland is unlikely to move from the top spot in the secrecy ranking unless the financial industry shifts its focus from gathering assets to implementing more transparent, spontaneous co-operation with other countries to counter tax evasion, according to Markus Meinzer, a researcher at Tax Justice Network based in Marbug, Germany.

“Swiss bankers are having a hard time because on the one hand they are being told they have to get clean and on the other hand are being pressurized to achieve their performance targets.,”

“To show its integrity, Switzerland has to sign up for automatic exchange of information”, he said.

Financial Secrecy, Index 2013

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