Financial Times Article on the State of Swiss Banks (9/6/18)

Ralph Atkins, Switzerland’s banks try to put the past behind them (FT.com 9/5/18), here.  

Key excerpts:

In total, Swiss banks have paid $5.5bn in US penalties since the first moves against them a decade ago. 

The Swiss would undoubtedly like to think the past is behind them. Times are certainly better. “After years of struggling with structural change stemming from the financial crisis, the tide has begun to turn,” consultancy KPMG reported recently in its annual survey of 90 Swiss private banks. 

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Swiss banks have overhauled compliance systems — Americans living in Switzerland today have a particularly hard time opening a bank account — and thrown out clients who cannot prove they are honest with their taxes. Bern has struck automatic exchange of information deals with EU states and 60 other countries. 

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Last month, two outstanding US tax cases — against Zürcher Kantonalbank and Basler Kantonalbank — were settled with penalties of $98.5m and $60.4m. The agreements offered a flashback to an era when Switzerland really was a haven for chancers. According to the US justice department, Basler Kantonalbank had in 2008 seen as a “business opportunity” the criminal investigations faced by its larger rival UBS. The Basel bank’s services had included “promoting” Swiss bank secrecy as a means of concealing assets and income. 

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Suspicions remain. Tax Justice Network, a lobby group, has Switzerland at the top of its “financial secrecy” index, reflecting its importance in global wealth management. Despite concessions on secrecy, the country continues to offer opportunities to evade tax to citizens of poorer countries, Tax Justice claims. It also criticises the “ongoing aggressive pursuit of financial sector whistleblowers”.