The stabbing of a pedestrian at a Swiss railway station this morning has sent a shudder through the chancelleries of Europe. It is not merely the horror of the attack itself, though the sight of a man with a knife quietly ending a life in a public concourse is a potent symbol of a fraying social contract. It is the awkward question of what the attack says about the Continent's willingness — or unwillingness — to learn from Britain's own bitter experience with the weaponisation of everyday life.
For the City of London, which has always placed a premium on stability and the rule of law, this is a disconcerting signal. The attacker, a 32-year-old asylum seeker from Eritrea with a history of mental instability, was known to Swiss authorities but considered too low a risk for detention. The parallels with the Fishmongers' Hall attack in London, where a convicted terrorist was released into the community, are unnerving.
The Swiss model of risk assessment, which prioritises individual liberties over collective security, stands in stark contrast to the post-2017 British approach of 'think again' reviews and automatic deportation for foreign offenders. The divergence matters for investors. Capital flees uncertainty, and a Europe that cannot secure its transport hubs is a Europe that invites higher risk premiums.
The Swiss franc, usually a safe harbour in times of crisis, will be watched closely. The yield on 10-year Swiss government bonds, already negative, could fall further as money rushes into assets perceived as insulated. But the real economic cost is in the erosion of the social fabric: each attack of this kind adds a small levy on public trust, raising the tax of social friction.
Swiss interior ministers are already calling for a review of immigration and asylum procedures. The markets will need to see action, not just words. Central banks can print money, but they cannot print confidence.
That must be earned through policies that credibly reduce the probability of such events. Britain's approach — detaining foreign nationals who pose a threat, regardless of the legal intricacies — may be distasteful to some European sensibilities, but it is a price the electorate is willing to pay. The Swiss, and by extension the EU, are now faced with a choice: adopt a more robust security posture or accept that their cities will become choppier places.
For investors, the calculus is simple: institutions that fail to contain violence are institutions that struggle to attract capital. The Bank of England took note of the London Bridge attack in 2019, and the market's immediate reaction was a dip in sterling. The same logic applies to the Swiss National Bank if this incident is followed by others.
The thread that holds the European security order together is fraying, and the needle of market sentiment is already twitching. This is not a crisis of the magnitude of a sovereign default, but it is a crisis of governance. And governance, as any City analyst will tell you, is the alpha and omega of long-term value.
