Sunday, January 13, 2013


The latest report from Ernst & Young, the accounting giant, states that only 21% of the Swiss banks interviewed have implemented the Clean Money Strategy that was unveiled a year ago by Finance Minister Eveline Widmer-Schlumpf. Swiss bankers appear to have preferred to disengage from the United States, rather than comply with the programme. This is extremely unwise.

I am not sure if this is arrogance, or whether the Swiss banking industry thinks that the United States will soon tire of its "take-no-prisoners" law enforcement policies. The Gnomes of Zurich need to come to terms with the new, transparent reality. To do otherwise just invites more targeting of Swiss financial institutions, only this time, the local and cantonal banks will be in cross-hairs of US law enforcement.

It is only going to get worse, for FATCA violations will probably spawn a whole new class of US enforcement actions. The Swiss financial sector has so much more going for it than solely bank secrecy; it needs to reform itself, or suffer a continuing increase in flight capital movement.

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