Thursday, February 19, 2009
The end of Swiss banking as we know it?
For long, Swiss banking has thrived because the banks have traditionally drawn a very thin line between tax fraud and tax avoidance. Tax avoidance is not a crime in Switzerland, unlike say in America, and that distinction allowed Swiss banking to flourish. Unfortunately, the distinction that made Switzerland awesomely rich also covered up some fairly dirty stuff. Every tin-pot dictator in the third world, for instance, found a way to squirrel money looted from tax-payers in Swiss banks. In fact, there are some reports that Indians alone have over $1.4 trillion stashed away in Swiss banks.
The IRS of the United States is not to be trifled with. In fact, one must never forget that Al Capone was not put away for murder, but for tax fraud. Swiss bankers, in particular those from UBS, found this out much to their chagrin earlier this week. UBS will have to reveal the names of Americans who have used Swiss banks to stash away their black money as part of a $780 million settlement. It is rumoured that the IRS is after 19,000 Americans who may have secret Swiss banking accounts. Of course, this move by UBS also probably means the end of banking secrecy in Switzerland or at least the end of the trust in the security of the Swiss banking system.
The IRS of the United States is not to be trifled with. In fact, one must never forget that Al Capone was not put away for murder, but for tax fraud. Swiss bankers, in particular those from UBS, found this out much to their chagrin earlier this week. UBS will have to reveal the names of Americans who have used Swiss banks to stash away their black money as part of a $780 million settlement. It is rumoured that the IRS is after 19,000 Americans who may have secret Swiss banking accounts. Of course, this move by UBS also probably means the end of banking secrecy in Switzerland or at least the end of the trust in the security of the Swiss banking system.
