Wednesday, July 27, 2011

Credit Suisse “worse off” than UBS in the US

This is going to be interesting. Reuters recently posted a useful story indicating how Credit Suisse was not likely to be getting the same backing from Switzerland that UBS did, in the sense that there is no appetite in Switzerland for a new tax treaty of the kind that was designed to help UBS settle U.S. charges against it.

Now we have a similar story, from a U.S. angle, explaining the bank's further woes. From Swissinfo:

lawyers and clients of Credit Suisse see the position of Switzerland’s second largest bank as more serious than that of its competitor UBS. First, there's this wee problem:
“The very serious allegations against Credit Suisse relate to a wider range of conduct extending beyond a tax conspiracy into a broader range of criminal activity,” [Scott] Michel of the Washington firm Caplin & Drysdale told swissinfo.ch.

“These are not just allegations that a Swiss bank opened accounts that they knew would not be reported to the IRS [Internal Revenue Service], there are also allegations that employees of the bank lied to the Federal Reserve, engaged in destruction of records, helped people try and evade DOJ [Department of Justice] investigation and provided unlicensed banking services to customers,” the lawyer representing some 30 Credit Suisse clients said.
And then, of course, there is this one, which adds another massive layer of trouble on the bank's shoulders:
In Washington the political climate is marked by the federal debt crisis; not a good backdrop for Credit Suisse to be in trouble. “There’s no sympathy anywhere in the government for people who are not paying their fair share in the context of big budget problems.”
Remember the time, just 10 years ago, when the U.S. Treasury Secretary appeared to say that tax evasion via foreign tax havens was "amusing?"

Well, the times, they are a'changing.

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