A federal judge has agreed to delay the UBS tax-evasion trial as the U.S. and the Swiss seek a resolution. UBS shares gained strongly on the presumption that a delay was near.
A source familiar with the situation told Reuters the talks, now led by the U.S. and Swiss governments, were aimed at finding a way to allow the bank to transfer client data without breaching Swiss law. No doubt the discussions, and perhaps even the nature of a settlement, will be murky.
That a settlement is being sought may be a short-sighted reason to buy UBS stock. Without its precious secrecy to define it, Swiss banking would lose the standing that has made it the wealth-management center of the world. The fact that the two sides are talking may indicate Washington is willing to accept less than unconditional surrender. But make no mistake: Settlement means less secrecy, not more. While a settlement would help the bank with this particular mess, it could have an added sting in the form of a payment from UBS to the U.S. government.
Longer term, tax lawyers say European governments, which are also trying to recoup unpaid tax money from offshore banks, could also put pressure on Switzerland as a global fight against tax cheats gathers pace.
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Having to give up secrecy will be a serious blow to the Swiss banking industry. I would applaud such a move as it would reveal a lot of murky money.
- Posted by Nikkei 225What does the US have to do with Swiss banking law?? They simply can’t stand the fact that not everyone in the world thinks like they do.
To be honest, considering the amount of American taxpayers’ money that goes into funding International Terrorism, illegal wars and private defence contractors, I think it would be good if far fewer Americans paid tax.
I stopped paying tax a long time ago (offshore companies, private banks etc). When I see what governments do with our taxes, I get happier each day that I don’t help them.
- Posted by 5flags