For long, Switzerland has been avoiding US accusations of hiding money for wealthy Americans.
But now, since eleven Swiss banks are under investigation in the US and there is pressure from Europe too, the Swiss needs a deal to remove the taint from their financial industry.
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Meanwhile, since Washington must consider the forthcoming elections into its thinking, and Germany is delaying ratification of a tax deal key to Switzerland’s efforts to strike similar agreements elsewhere in Europe, the Swiss may remain unaware for a while.
The wait will be difficult for Switzerland which it counts on banking for 7% of its economic output, until the Swiss banks know how much information they need to share with foreign tax authorities they will struggle to attract new clients.
Currently, the share prices of its banks, Credit Suisse and Julius Baer, which are being investigated, are falling as investors fret about earnings.
Switzerland’s Finance Minister Eveline Widmer-Schlumpf remarked "We are prepared to sign a settlement with the US for the Swiss banks today. We feel we have made a constructive proposal to the US but it is up to them to accept it or not."
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By GlobalData"This depends on whether the US is willing to reach a settlement before or after their elections, which is unclear at the moment," she further added.
