(August 31) – “The Credit Suisse Group’s planned acquisition of Donaldson, Lufkin & Jenrette, following hard on the heels of the deal for PaineWebber by the Swiss banking giant, UBS AG, is likely to provide further illustration of Swiss banking’s flair for penetrating Wall Street and managing the cultural clashes that expansion outside Europe often brings,” writes John Tagliabue in today’s New York Times.

“The Swiss early on sensed the need to expand beyond a domestic market of seven million. And they seem, more than their European neighbors, to have learned from missteps and become better able to balance the need in financial businesses between autonomy and control.

“This ability to adapt is increasingly crucial as European banks break out of their traditional national markets. Many, seeking to grow in size and gain expertise in banking skills less developed in Continental Europe, are acquiring banks in Britain and the United States. The pressure to do so has intensified as European capital markets have unified, spurred by the creation of a single currency.

“Financial service businesses from corporate banking to personal investment are increasingly shedding the tightly cosseted and closely managed rules of European finance to take on more of the freewheeling, creative quality common in Britain and the United States.

“Last year, for example, Deutsche Bank expanded its U.S. presence by acquiring Bankers Trust for $10 billion.

“But Philip Zieschang, an analyst at Bank Julius Baer in Zurich, said it was the Swiss who pioneered the penetration of the Anglo-Saxon banking world. In 1995, the old Swiss Bank Corp., which merged two years later with Union Bank of Switzerland to form UBS, acquired SG Warburg, a British investment bank with a sizable Wall Street presence. Swiss Bank also acquired two small but valuable firms in Chicago: O’Connor Associates, a derivatives business, and Brinson Asset Management, a money management firm.

“‘The Swiss were aware at an earlier stage of the critical importance of growing internationally,’ Zieschang said.

“Credit Suisse had moved even before then. In 1978, it established a joint venture with the Bank of Boston Corp. called Financiere Credit Suisse First Boston. That was very much a learning experience, said Bryan Crossley, an analyst at ABN Amro in London. In 1988, Credit Suisse First Boston was beleaguered by duplication and friction, not least because of financial fallout from the stock market crash the previous autumn, prompting Credit Suisse in Zurich to take full control. In the process, it acquired a global investment bank and a powerful calling card in New York, London and Europe.