Switzerland says goodbye to light touch regulation
LONDON, May 3 (Thomson Reuters Accelus) - These days even the Swiss are fed up with their bankers. The financial crisis has riled Swiss citizens to the point that the Alpine country’s reputation for light-touch financial regulation will soon be a thing of the past. In a direct democracy such as Switzerland, where every citizen can vote on laws and even propose them, the people have spoken. What they have said is: we want more rules and regulation for bankers and asset managers.
“In the past people were against regulations which seemed too restrictive, but this is changing. The public mood is still critical vis-à-vis the banks and the culture of big bonuses for board of directors and management. Now we may see overregulation also because of the immediate political pressure facing a direct democracy,” Marc Raggenbass, head of the regulatory, compliance and legal practice at Deloitte in Zurich, told Thomson Reuters. (more…)
ANALYSIS-Global rich want trusts, Swiss banks stay wary
By Chris Vellacott and Lisa Jucca
ZURICH, May 26 (Reuters) – Rich bank customers are showing a growing interest in Anglo-Saxon trusts as a way to structure their wealth, but Swiss private banks are reluctant to up their offer as international pressure on tax disclosure builds.
Trusts, a legal concept born in 13th-century England to safeguard the assets of knights leaving for the Crusades, make up an estimated $5-trillion global market and are viewed by lawyers and accountants as a growth area for the heavily pressed Swiss offshore banking industry.
Switzerland, the world’s leading offshore centre, came under attack during the credit crisis by cash-strapped nations seeking to recoup tax revenues and its banks are seeking a new business model while traditional bank secrecy is eroding.
Several Swiss private bankers told Reuters they had noticed an increase in demand by wealthy customers for trusts, which are appealing to clients from emerging markets such as Latin America or Russia as they offer protection from expropriation, forced inheritance laws or expensive divorce settlements.
Trusts — seen by some experts as only worthwile for clients with at least $2 million in assets — can also help reduce a client’s tax burden as the assets are passed on to a third party in a low-tax jurisdiction.
But many Swiss private bankers remain wary of trusts as such structures could attract more unwelcome attention from foreign tax authorities, and there is an intrinsic conflict of interest for trustees between their loyalty to the client and to the bank that employs them.
Merkel tries to calm tempers in Swiss tax dispute
By Madeline Chambers
BERLIN, Feb 8 (Reuters) – German Chancellor Angela Merkel and Switzerland’s president have agreed that a dispute over stolen Swiss bank account data which Germany wants to buy should not harm ties between the neighbours, her spokesman said on Monday.
Merkel, who spoke to President Doris Leuthard on Saturday in an effort to calm tempers, also recieved assurances Switzerland would continue talks on a double taxation deal that would bring Switzerland into line with OECD standards.
Switzerland’s large private banking industry has been shaken in the last week by German politicians saying they would pay for data on clients of Swiss banks who may have been evading German taxes even if the information was obtained illegally.
“(Merkel and Leuthard) agreed that good neighbourly relations should not be damaged by this ongoing issue,” Merkel’s spokesman Ulrich Wilhelm told a news conference.
German media have reported the data could lead authorities to a 400 million euro tax windfall but the row has also raised the possibility of a diplomatic spat. Swiss politicians have attacked Germany’s plans, one even likening it to bank robbery.
Germany is Switzlerland’s main trading partner and home to a large client base for Swiss private banks.
European states keep Swiss bank secrecy under siege
By Jason Rhodes and Ben Berkowitz
BERNE/AMSTERDAM, Feb 3 (Reuters) – European states lined up behind German Chancellor Angela Merkel to expose tax cheats in a combined assault on the Swiss banking secrecy laws that help protect them.
German Finance Minister Wolfgang Schaeuble sent shivers through the large Swiss private banking industry this week when he said Berlin was prepared to pay for stolen data belonging to potential tax cheats at a Swiss bank, raising the bar in the fight against tax evasion.
Now, the Dutch, Belgian and Austrian governments have also flagged interest in obtaining a copy of a compact disc with tax-sensitive data that Berlin may soon buy from an informant.
Swiss Finance Minister Hans-Rudolf Merz said on Wednesday the Swiss would not help Germany or others hunt tax cheats on the basis of stolen Swiss bank data, but tried to defuse the escalating row by saying Berne would not retaliate.
“It is obvious that such a theft is a criminal act,” Merz said. “Switzerland should therefore not offer administrative (tax) assistance in such cases either now or in future.”
But he added that Switzerland would continue to engage in talks aimed at signing a new treaty with Germany.
ANALYSIS-Pressure mounts on Swiss private banks
By Lisa Jucca and Rupert Pretterklieber
ZURICH, Feb 2 (Reuters) – Swiss private bankers say attacks on the country’s treasured bank secrecy law turned 2009 into an “annus horribilis.”
A fresh German offensive against tax cheats does not make 2010 look any better for the key guardians of Switzerland’s multi-trillion-dollar wealth management industry.
Despite a settlement in the United States aimed at ending a tax probe against Swiss bank giant UBS and Switzerland’s pledges to help foreign authorities hunt down tax dodgers, the pressure on already weakened Swiss bank client confidentiality refuses to subside.
Germany’s announcement on Monday that it was prepared to pay for data on clients of a Swiss bank touted by a whisteblower has sent shivers across Swiss banking.
“This is a case that affects the whole of the Swiss financial market place because confidentiality and privacy is one of the pillars of the Swiss private banking model,” said Rainer Skierka, senior analyst at private bank Sarasin.
“This is shattered in a way and it is certainly not helping (Switzerland). They have to do everything to get this problem solved…and not let those who stole the data get away.”
Swiss central banker backs universal bank model – paper
Jan 16 (Reuters) – Switzerland’s two big banks — UBS and Credit Suisse — should not be forced to split their wealth management and commercial banking operations into separate entities, the new head of the country’s central bank said on Saturday.
Philipp Hildebrand, who took over as chairman of the Swiss National Bank at the start of the month, said the universal banking model provided useful synergies for Swiss banks.
Hildebrand has said repeatedly that major Swiss banks need tighter regulation to deal with the “too big to fail” problem.
But he said in an interview in the Swiss daily Le Temps that something as radical as the Glass Steagall Act, which previously separated investment and commercial bank functions in the United States, would not make sense in Switzerland.
“The universal banking model represents a form of risk diversification,” Hildebrand was quoted as saying.
He recalled that in the 1980s Swiss banks had been able to absorb losses — amounting to some 40 billion Swiss francs ($39.10 billion at today’s rates) in their traditional mortgage business thanks to profits in the investment banking side.
At the same time wealth managers needed to be able to offer their ultra-rich customers the full range of investment banking services, for instance to help with in mergers and acquisitions involving companies they own, he said.
Swiss call in Italian envoy to explain bank raids
ZURICH, Oct 28 (Reuters) – Switzerland has summoned the Italian ambassador to demand an explanation of raids by police and tax inspectors on dozens of Swiss banks in Italy, the Swiss Foreign Ministry said on Wednesday.
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