The world’s wealthy will continue to trust their fortunes to Switzerland even as a clampdown on tax evasion raises questions on the country’s secrecy laws, according to a number of senior bankers.
At the the Reuters Global Wealth Management Summit in Geneva, Deutsche Bank head, Josef Ackermann, said, "The worn-out cliche has it that the sector was built on banks offering shelter to tax frauds and illicit money. This is a gross distortion."
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Ackerman, who is now with Zurich Insuranc, said "the scope and quality of Switzerland’s financial sector has been, and continues to be, difficult to replicate abroad" because the success of the Swiss financial industry was a result of enduring political, economic and social stability, "as well as factors such as low taxes and a multi-talented workforce".
But that tradition has come under fire in recent years as countries including the US, Germany and France have sought to fill budget deficits by pursuing tax dodgers with Swiss accounts, forcing Switzerland to hand over data on bank clients.
The Swiss government, recently, 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.
The Swiss National Bank also said it does not plan to rescue banks made insolvent by fines for US tax evasion probes, according to the central bank’s chairman.
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By GlobalDataJuerg Zeltner, head of the UBS private bank, said at the summit that the bank secrecy threats, however, are not leading to an exodus of clients.
"There are very, very many good reasons for many, many wealthy clients to bring money into Switzerland," said Zeltner.
Alexander Classen, the head of international operations at Coutts, said, "We feel the increased costs of regulation of cross-border business.
"Swiss banks have to reinvent themselves and deliver risk-adjusted provision and quality service."
