Safe as a Swiss bank?

Now that Luxembourg and Austria have given ground on bank secrecy rules, the spotlight has turned to Switzerland, a country famous for the anonymity it provides in equal measure to the rich, the famous and those who want to hide their money.

Now that Luxembourg and Austria have given ground on bank secrecy rules, the spotlight has turned to Switzerland, a country famous for the anonymity it provides in equal measure to the rich, the famous and those who want to hide their money.

More than four years ago, the Swiss made painful concessions to US authorities. But as impatience with tax avoiders spreads to a region where governments are desperate for revenue, the Swiss are bracing for a new onslaught on their cherished bank secrecy rules - this time from nations in the European Union.

The pledges to share more bank account data - offered up first by Luxembourg, then by Austria at a European summit meeting this week - were made on the condition that countries outside the EU, notably Switzerland, do so, too.

As more traditional tax havens fall into line with demands for greater transparency, the Swiss have become more isolated than ever. Some analysts say that new concessions by the Swiss may now be unavoidable, although few expect those changes to happen overnight.

The pressures on the Swiss and others have built as governments and the public, weary of austerity, force the issue of tax fairness to the front of European policy debates, casting a critical light on who pays and who does not.

In that landscape, Switzerland still stands out. Swiss banks have recently been linked to political scandals in France, Greece and Spain. Secret Swiss accounts were said to have been used by politicians and the well connected to operate slush funds, skirt taxes and stash away millions, stoking popular anger as citizens are asked to pay more taxes while accepting cuts to a range of social services.

The gestures by Luxembourg and Austria further risk Switzerland's position as the world's largest private wealth management centre.

"The decision ... is probably the death knell for Swiss banking secrecy, because it really leaves Switzerland without any key ally in the European Union," said Urs Ziswiler, who was Switzerland's ambassador in Washington.

New York Times

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles