Swiss Government Gets Involved with UBS
July 8, 2009 by Miranda Marquit
Filed under Finance
Over the past several months, the U.S. has been involved in a battle with Swiss banking giant UBS over the disclosure of names of clients who might be evading taxes. UBS has already paid millions in fines and turned over names of U.S. clients. But the government wants even more. It is assumed that 52,000 
account holders may be taking advantage of Swiss banking secrecy laws and UBS may be complicit in helping some of them avoid paying U.S. taxes.
While UBS has been making grudging shows of cooperation, the Swiss government has been less accommodating. Indeed, the government says it is willing to issue an order barring UBS from handing over client names . As a result, many people are withdrawing money from UBS Swiss bank accounts , and the bank is finding it difficult to attract new money.
How this turns out (and there are estimates that a settlement in the billions could result) might have bearing on the future of Swiss banking secrecy, and an impact on the way that individuals and businesses do their international banking .
Image source: Wikipedia
This is very bad news for UBS. If they give in, they lose massive amounts of money and will never return to the level of prominence they’ve enjoyed for many years. If they don’t, they risk the US issuing sanctions (however unjustified) against them.
Ultimately, it probably won’t make any difference to the world of offshore banking, though. One reporter says, “Bermuda and Ireland… are openly competing to become the new tax haven of choice for private depositors.” (full video at http://www.newsy.com/videos/timeout_of_the_titans)
You are right that UBS has reached a point where it is in a no-win. Swiss banking as a whole is seeing its reputation slip away.