The Swiss National Bank does not plan to rescue banks made insolvent by fines for US tax evasion probes, according to the central bank’s chairman.
Thomas Jordan told the Schweiz am Sonntag newspaper in an interview, "It is not the National Bank’s job to save banks if they are insolvent. It has a duty to contribute to the system’s stability."
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Tax evasion crackdown
The Swiss government has agreed to create a legal basis that will enable its banks to settle investigations by US authorities into their role in assisting wealthy Americans in evading taxes, which may require lenders to pay up to billions of dollars in fines to the US authorities.
After a cabinet meeting earlier in the day, the Swiss finance department said the government was proposing legislation to be rushed through parliament in the summer session in June.
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By GlobalDataThe new agreement is expected to give dozens of Swiss banks permission to reach settlements. However, the Swiss government has said no changes will be made to rules protecting clients’ identities.
Special permission will, reportedly, be granted to banks, to give them a chance to turn over new information about the behaviour of their staff and clients.
Settlement coming
The long-running tax dispute between the Switzerland and the US is on its way to being settled.
The Swiss finance department was quoted saying, "If banks were not authorised to cooperate with the US authorities, the initiation of further criminal investigations or charges concerning banking institutions could not be ruled out."
Switzerland’s long tradition of bank secrecy, which protects the identity of its clients, has led to the country becoming a haven for untaxed funds and the world’s biggest offshore centre, with US$2 trillion in assets.
