Clock Ticking for Swiss bank secrecy (good riddance!)

[Hello_Kitty]

:nopity: Swiss banks have sheltered the assets of Nazis, drug kingpins, terrorists, and various and sundry kleptocrats for too long. There is NO reason for this hidebound secrecy to exist other than for people to HIDE MONEY THEY SHOULDN'T BE HIDING.



Clock ticking for Swiss bank secrecy


The Swiss government approved UBS's settlement with the US authorities


By Imogen Foulkes
BBC News, Geneva


The decision by Switzerland's biggest bank, UBS, to hand over details of a few hundred US clients to the US authorities has shocked the Swiss banking community, and led many to the conclusion that the days of Swiss banking secrecy are now numbered.

UBS had already admitted that some of its US staff helped wealthy American clients avoid paying tax by hiding money in Swiss bank accounts.

However, on Wednesday it handed over the client details, together with a compensation payment of $780m (£549m), before the legal process had even finished.

It became evident that if the American authorities would bring UBS to an indictment... the whole threat would have been falling also on our economy

Swiss President Hans-Rudolf Merz

The Swiss government, which approved UBS's actions in a late-night emergency cabinet meeting, said the bank had no choice.

The US Department of Justice had issued Switzerland with a deadline which, had it not been met, could have led to UBS losing its US operating licence.

Swiss President and Finance Minister Hans-Rudolf Merz said the move would have threatened the very existence of the bank, and with it, the Swiss economy.

Under pressure

But many Swiss politicians and bankers are outraged at what they see as the Swiss government's weakness in the face of unfair pressure from the US.


UBS hoped that settling with the US would safeguard banking secrecy

"This is a clear case of power triumphing over the law," said Gabi Huber, member of parliament with the centre-right Radical Party.

"Switzerland's banking secrecy has been put under real pressure."

Hans Geiger, emeritus professor of banking at the University of Zurich, said he was astonished at the "unbelievable weakness" of the government.

And Toni Brunner, president of the right-wing Swiss People's Party, went even further.

"We are a sovereign state, and other countries should not be able to tell us what to do," he said. "It's time to enshrine banking secrecy in our constitution."

Confidentiality

But what is Swiss banking secrecy really, and why is Switzerland so fiercely protective of it?

"Basically, it is the obligation of a bank to treat the financial affairs of its clients in confidence," explained James Nason, spokesman for the Swiss Bankers' Association.




http://news.bbc.co.uk/2/hi/business/7901832.stm