Let’s look at the recent history of UBS and Credit Suisse in the U.S. Add to this other Swiss banks under investigation for assisting U.S. citizens evade taxes, an investigation that is ongoing and costing Swiss banks [in the U.S. – not in Switzerland] huge fines to keep banking there.
Switzerland has laws which protect banking secrecy. If a Swiss banker discloses client information outside the bank he is liable for imprisonment. Switzerland, after all, has a history of over 300 years of protecting the assets of foreigners during World Wars and from outside governmental pressures.
Even in the recent UBS scandal where it was accused by the U.S. I.R.S. of harboring U.S. tax evaders, these bankers of UBS in the States, face imprisonment inside the U.S. if they did not disclose the names of account holders and faced imprisonment in Switzerland if they did disclose names.
After lengthy negotiations that included the Swiss Government, it was decided to disclose the names of 4,050 names out of 45,000 U.S. client so UBS. It appears that the Swiss government acceded to the principal that a tax evader was a criminal and so his information could be handed to the U.S. authorities, but the Swiss government refused to allow the disclosure of all 45,000 names, which is what the I.R.S. wanted. So the Swiss kept their integrity, the I.R.S. got [only] 4,050 tax evaders and Swiss bankers did not go to prison, but UBS got a massive fine, which they had to pay to continue banking in the U.S.
During that entire time and through until now, Swiss banks have been loathe to take on U.S. clients and have been nervous about continuing to keep the ones they already have. It becomes clear that the current story of offering ‘allocated’ accounts fits neatly into this story. Many Swiss banks simply dropped U.S. customers and refused new ones, erroneously believing that it would get rid of the problem.
This is Part 2 of Article Swiss Bank Clients Move From ‘Unallocated’ to ‘Allocated’ Gold Accounts