Luca Schenk: Long and Winding Road to Finance
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Luca Schenk: Long and Winding Road to Finance

A BOCCONI GRADUATE IN BUSINESS ADMINISTRATION, LUCA WORKED IN THE FURNITUREMAKING FAMILY FIRM NEAR VARESE, HANDLED MERGERS, THEN CONSULTING, BEFORE ENTERING THE WORLD OF SWISS FINANCE. TODAY, HE DIRECTS BX SWISS, THE STOCK EXCHANGE FOR SMES. HE SAYS THAT AT BOCCONI, HE LEARNED METHOD

Following popular lore, one could say that certain (professional) love stories never end, they just make twists and turns but then reemerge again stronger than before. From his desk as CEO at BX Swiss, the Bern-based Swiss bourse that oversees the financial needs of small and medium firms and those of Swiss investors, Luca Schenk goes back in time to the earlier stages of his career, and can’t help smiling when he remembers all those turns taken that seemed to take him away from his original passion: finance.

“When I started the university, I had very clear in mind my educational target”, says Schenk. “Those were the years when high finance was front-page news and to me it was clear from the start that my path was going towards finance and the stock exchange. Then, just one month after classes started, Black Monday hit (October 19, 1987), all the stock exchanges of the world collapsed, and during those very days the movie Wall Street came out. Those two events had me ponder and made me orient my studies towards corporate finance rather financial trading”. His long detour started right after graduation, when he has to work for the family firm, which manufactures furniture. Then he worked in M&A and strategic financial consulting in industries ranging from airport development to the development of renewables, to finally arrive at the long-desired objective, a strategic and dynamic position in finance: chief executive of a bourse.

- What is most pleasant to recall about your Bocconi years?

The university was not only a place for study and knowledge, it was a meeting point to debate interests and passions linking faculty and students. The fact that the Internet was not yet there made our relations less frequent but more solid. I remember that one Friday afternoon a professor, Alberto Grando, as he finished his lecture, smilingly threw us a challenge: “If tomorrow somebody wants to discuss thsi class, he/she can find me at the Creperia in Cervinia. I’ll buy drinks for everybody”. We went to the ski resort and he kept his promise.

- What are the most important teachings you learnt at Bocconi?

The method taught at Bocconi is decisive: it means to analyze issues and cases and find creative entrepreneurial solutions, to work hard and get used to competing with the best. Also, in my opinion, the analytical tools I was taught 25 years ago remain relevant today.

- What does it mean to be a manager when your company is the stock exchange?

Running a bourse is exciting. Because of its nature, a stock exchange fulfills two basic needs: raising capital for firms and giving return opportunities to investors. You need to give a simple and convenient solution to both. This means you have to cut down complexity, by defining dynamic rules for listing and trading which are also stay within the regulatory framework, and create transparency and equal treatment and protection for all parties. Supervision, control, and in the case of small entrepreneurs and investors, also coaching are essential parts of my job, so that the bourse can attain an equilibrium of individual utilities. My objective is to make investment in various asset classes transparent and accessible also to small investors.

- In what the BX Berne exchange, today BX Swiss, distinguishes itself from similar European exchanges (Aim in London, Open Market in Frankfurt, Free Markets in Paris)?

Self-regulation is a mark of distinction of Swiss exchanges, a principle that makes bourses able to respond more quickly and flexibly to market needs with country-specific listing and trading rules. For example, in Switzerland the IPO application is evaluated by the bourse itself, not the financial supervision authority. At BX, we have sought to diversify our offer for each market segment: so for small and medium firms we have found the right rules, by accepting Swiss accounting standards, rather than pretending IFRS (International Financial Reporting Standards) or US GAAP (Generally Accepted Accounting Principles). For trading in international stocks, we have created a unique trading model, in order to protect the investor and always have sufficient liquidity. Also, unlike major stock exchanges, we have been avoiding high-frequency traders, who have come under heavy criticism in recent years in all financial markets.

- There are around 50 companies listed in Bern, a rather small number when compared to similar stock exchanges...

The low number not only has to do with market size, but is also due to cultural factors. Swiss companies are usually well funded from the start and there is a traditional reluctance on the part of entrepreneurs to open themselves to the public. To the number of listed Swiss firms, one should add more than 1,000 international blue chips that are traded here in Swiss francs each day. Finally, I don’t think it’s all about volume. BX enjoys a very good reputation, a thing not many others can boast.

A few months ago, at the Paris headquarters of OECD, Switzerland, along with Singapore and other countries, signed an entente for the abolition of so-called banking secrecy. From your vantage point, what repercussions there will be on Swiss stock exchanges and their attractiveness vis-à-vis foreign investors?

We live in an age where the imperative of transparency is paramount. With or without banking secrecy, Swiss banks have excellent know-how and quality in asset management. For instance, Switzerland has pioneered regulations to prevent money laundering. Also, Switzerland and the Swiss franc are sacred in the world. For its legal and business infrastructure, the country remains a favorite destination for corporate headquartering. I am therefore optimistic about the future of the Swiss financial marketplace, although I cannot hide that I am worried by the continuous fingerpointing by Washington and Bruxelles, which weakens Switzerland’s financial reputation, while omitting to look closer at home for wrongdoing. Safety, trust, and good service will continue to be key competitive assets in international finance. Who knows, there could be a first-mover advantage also in such an environment.



by Lorenzo Martini
Translated by Alex Foti


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