(HT: houseofroberts)

The Swiss banks are renowned for their secrecy and their lenient stance when it comes to tax evasion and this makes Switzerland into the top destination for money from all kinds of sources. Websites like www.swiss-offshore-banking.com praise the advantages of the system:

The Swiss Banking system is second to none. Revered the world over, Swiss Bankers are known for their privacy, professionalism and discretion. Swiss banking laws are very strict and it is illegal for a banker to reveal the personal details of an account number unless ordered to do so by a judge. This is long established in Swiss law. Any banker who reveals information about you without your consent risks a custodial sentance if convicted, with the only exceptions to this rule concerning serious violent crimes. Swiss banking secrecy is not lifted for tax evasion. (emphasis by me) The reason for this is because failure to report income or assets is not considered a crime under Swiss banking law. As such, neither the Swiss government, nor any other government, can obtain information about your bank account. They must first convince a Swiss judge that you have committed a serious crime punishable by the Swiss Penal Code.

No more. In a landmark development the Swiss Bank UBS has agreed to hand over data of about 300 US citizens and their banking accounts to the IRS and pay a $ 780 mn fine on top of that. This hit Switzerland where it hurts most. The finance industry is one of the most important contributors to Swiss wealth the outcry is immense: The Zurich based NZZ writes:

Wenn die Schweizerische Finanzmarktaufsicht (Finma) tatsächlich, wie das Gerücht geht, unmittelbar davorsteht, in einer bisher einmaligen Aktion Daten von einigen hundert Kunden der UBS an die amerikanischen Behörden auszuliefern, oder dies womöglich schon getan hat, ist dies ein folgenschwerer Schlag für den Finanzplatz Schweiz, aber auch für den Rechtsstaat Schweiz. If the Swiss financial oversight agency (Finma), as rumours have it, is set to hand out data on several hundred customers to US authorities, or possibly has already done so, this is a severe blow to Switzerland’s finance market as well as it’s legal system. (my translation and in case of errors, my bad) (article)

Well, it’s not an “if” anymore here’s the text of the agreement.

Switzerland’s neighbours, namely the Germans are waiting for a crack in the armour of the Swiss banking secrecy for quite a while now and the pressure on Switzerland was growing during the last months. After the fall of the tax haven Liechtenstein in the wake of the arrest of former Deutsche Post boss Zumwinkel, it looks as if Switzerland could be next. This comes at a most inconvenient moment. Swiss banks have suffered greatly from the banking crisis and there is a credit bubble in Eastern Europe on the verge of bursting which may lead to another wave of write-downs and will bring the Swiss economy and currency to the verge of desaster.

I can’t wait to read tomorrow’s newspaper and I brace for the opening of the Swiss stock exchange.

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