The partners who own Swiss-based private banks Pictet and Lombard Odier are each shedding unlimited liability for their banking arms, as part of move towards corporate partnership status due to become effective at the end of the year.

The move will end centuries of tradition, where depositors knew that partners would lose everything if the banks were to implode. This helped to explain why Pictet and Lombard Odier saw a dramatic increase in deposits after the credit crisis, which unsettled the wealth arms of their big investment banking rivals UBS and Credit Suisse.