Swiss banks cutting U.S. clients loose

Europe News.Net
Saturday 4th July, 2009

Swiss banks are shunning business from the U.S. amid concerns over legal issues and prospects for tighter regulation.

The U.S. is also pushing Swiss banks to open their books to tax investigators despite Swiss secrecy laws.

The banking industry in Switzerland believes the U.S. has blackened the country's reputation and encouraged the perception that Swiss banks are used for money-laundering, and for hiding cash deposits derived from criminal activity, or for tax evasion.

This week the giant Swiss bank UBS took the unprecedented step of preventing U.S. clients from accessing their accounts. UBS is entangled in a major legal case with U.S. tax authorities, where the IRS is demanding the Swiss bank provide confidential information on 52,000 accounts held by U.S. individuals or other entities.

It is not on its own. A spokesman for Bank Raiffeisen, Stefan Kern, told newsagency swissinfo, "We are recommending our banks not to open any new client relations to clients living in the U.S. The future procedures with the US are unclear."

Even U.S. citizens that have residency in Switzerland are being shunned by local banks.

"More banks are publicly announcing that they do not want American clients anymore. The banks are simply not willing to take such risks anymore and are simply eliminating American clients," Kern said.

"The U.S. administration has decided that it is justified to turn its citizens into toxic clients."

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