Thursday, February 09, 2012

New York Times demands no compromise in battle against Swiss banks

In its editorial today the New York Times demands that the US government pushes ahead with its battle to bring tax evaders to court. While the British and German governments plough on with their shabby deals with the Swiss government, the US has been pushing Swiss banks to reveal data about US criminals hiding behind Swiss banking secrecy laws, and although the banks are trying to find wriggle room, the NYT sees no room for compromise:

"Almost three years after UBS, Switzerland’s biggest bank, paid a $780 million fine for helping Americans evade taxes and agreed to hand over the names of more than 4,500 American account holders, the Swiss banking industry refuses to exit the business of tax evasion. And the Swiss government still insists on protecting it from scrutiny. The United States should not compromise in pursuing the data it needs on American tax cheats."

Who, apart from criminal tax evaders and the bankers who profit from flogging banking secrecy, would disagree? This is time for governments of all democratic countries to rid the world of banking secrecy. The US government should press home its advantage. As the NYT rightly points out, the Swiss banks are totally vulnerable here, and if they persist in defending the indefensible the US government can take strong counter-meaures:

"There is no need for the United States to accept this sort of arrangement. If Switzerland stonewalls, the Justice Department can indict banks that benefit from tax evasion and seize their assets in the United States, moves that could put them out of business. At some point, the Swiss government will find that result a lot more costly than handing over information on American tax cheats. "

Read the full editorial here.

The Economist is also running a good article about the travails of Swiss banking, citing TJN research and TJN staffers. Read all about it here.

One of the things The Economist notes is crucial: the chance in the public mood in Switzerland
When Philipp Hildebrand, the central-bank boss, resigned in January over a currency trade by his wife, public concern centred on his possible lapse of judgment, not the privacy breach that revealed it (the trade was leaked by an employee at a private bank). In years past, it would have been the other way round.
That is admittedly just an anecdote - but a telling and significant one. As we have taken to saying recently, the times they are a-changin'.


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