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Brotherly love, five hundred years of democracy and peace – and what did that produce? The cuckoo clock. That was Graham Greene's famous put-down of the Swiss, spoken by Orson Welles as Harry Lime, the villain in the film, The Third Man. But for anybody who knows Switzerland, it's a one-sided caricature of a nation, which oscillates between the smug, prosperous self-satisfaction lampooned by Greene and periodic bouts of thundering self-critical rage.

Switzerland is currently going through one of its periods of pious breast-beating and moralistic fury. The target of the recent rage is overpaid bosses; men such as Marcel Ospel, the chairman of UBS, the bank which was forced to cancel $35-million in bonuses after shareholder protests. Leading the charge against fat cattery is a Swiss businessman, Thomas Minder who secured enough supporters for his campaign against abusive boardroom remuneration to launch a nation-wide referendum in support of reform. The vote is on Sunday and polls are pointing to a thundering "yes" which would give Switzerland the strictest controls on the planet over directors' pay. These would include compulsory and binding annual shareholder votes on boardroom remuneration packages, annual votes on the composition of the board and the prohibition of "golden handshakes" and "golden parachutes" as well as a ban on bonuses linked to corporate acquisitions and disposals. And just to remove any doubt, a breach of these rules carries a criminal sanction of up to three years in jail.

After many decades of peaceful post-Second World War wealth accumulation (Switzerland has the world's fourth highest GDP per capita at $83,000) the Swiss are throwing their toys out of the pram. There is a counterproposal which envisages a shareholder say on pay which is non-binding and will become law if the Minder initiative fails. But the soft option now seems unlikely – the Swiss are determined to rein in boardroom piggery which Mr. Minder believes to be a vulgar American import. He blames the culture of U.S. investment banking for infecting Swiss banks and big business with the winner-takes-all style of leadership and reward.

With its history of bank secrecy and low taxes, Switzerland is often seen as a wildly capitalistic society but this is to misunderstand Swiss culture and politics. From its origins, Switzerland was a society based on consensus and compromise, a country created by small mountain communities forging alliances to fight a common enemy. The Swiss don't like show and they expect their leaders to behave modestly – Switzerland is always governed by a coalition of the leading parties and real power is devolved to the cantonal (state) governments which decide on the things that matter to most people.

Until public outrage erupts. The Swiss are fed up with their banks. The revelation that UBS was hugely exposed to dodgy derivatives in the financial crash and then paid a fine of $780-million to the U.S. Department of Justice to avoid charges of aiding tax evasion by its customers in the United States, has led to a massive regulatory clampdown. It has all but ended traditional bank secrecy. It is nothing less than a public rebellion against the power of capital and those who weild it and right now it seems to be winning, in a very sober and very Swiss way.

Carl Mortished is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights.

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UBS Group Ag ADR
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