The US judges and courts have managed at last to shoot a big hole into the thick wall of the Swiss bankers secret. UBS, the Swiss biggest bank, was forced down to hand over the files of about 300 US customers that are under allegation of tax fraud. The Swiss bankers secret was untouchable like a virgin and is unveiled now in a lot of single cases because UBS has had no other choice. They had to comply with the US authority. Otherwise they would have risked running into a similarly disastrous court case as it has happened with Arthur Andersen.



The situation after the UBS seizure





The Swiss legislation is still the same but US customers accounts at UBS risk getting reported to the US tax authority. The US authority goes on fighting against the bankers secret and UBS is just their first target.



Foreign and in particular US deposits are safer at Swiss banks without any branches or affiliates in the US. The US authority cannot reach these banks. There are many small Swiss banks that run an excellent private banking service and that operate without any vulnerable ties to the US. Unlike UBS or CS they cannot be forced down by the US authority.



The outlines of a probable deal about the bankers secret



The Swiss government tries probably to achieve a deal with US and EC authorities. EC might ally the US policy against the Swiss bankers secret. Switzerland could offer US and EC a deal that could be designed as follow: The Swiss bankers secret stays as before and all information about US and EC customers remains kept secret towards these authorities. Switzerland offers in exchange to collect the withholding taxes on the yield of all securities of US and EC citizens at Swiss banks and to submit this money to the US and EC tax authorities. This could create a win-win situation.



The US and EC prefer, of course, the disclosure of all the data of assets of their citizens at a Swiss bank. A win-win deal with Switzerland, however, could have some charm to US and EC. If they squeezed Switzerland to lift the bankers secret to their tax authorities, the US and EC customers of Swiss banks would transfer their assets to other states that still maintain a strict bankers secret, e.g. Austria, Luxembourg, Dubai, Singapore, some Caribbean Sea tax oasis. Nothing would be gained for US and EC.



Arguments for a safe money haven, even without bankers secret



Even in a world where the Swiss banks would report to the tax authorities of the democratic legitimated US and EC states, there were still strong arguments to keep an account at a Swiss bank for these citizens. The service of Swiss banks is still superb and that means added value for foreign customers. The value of their assets, in particular if denominated in Swiss francs, is protected against currency losses. The Swiss franc is traditionally a very hard currency and Switzerland a political and economic very stable and safe country. The Swiss franc has seen the devaluation of many other currencies during its history, US Dollar and British Pounds included. There are also many problems within the European Currency Unit that could stress the Euro. Thus it could be an advantage for any citizens to keep a part of their savings and assets at a Swiss bank in order to preserve their value. Whenever the world is in uproar - and we could go towards a world of more uncertainty and even higher inflation after the actual financial crisis - people bring their money to the save haven Switzerland. More about how to make money can be read at Make Money Tip.



Liliane Waldner