Switzerland Needs A Rescue

Posted by Greg Michaels, Oct 30, 2009, 10:12am

Saint Bernards.jpgPart of the understanding a neutral country expects from everybody else is ‘you don’t mess in our affairs and we won’t mess in yours’. And, for the most part, foreign governments have kept themselves out of what goes on inside Switzerland’s borders. But with Italian police conducting raids on Swiss banks operating in Italy and other major European governments turning up the heat on their citizens hiding assets in Switzerland, this is as close the Swiss have come to a declaration of war in several hundred years. The stakes in this game are high.

According to KPMG, as much as 80% of the Europeans’ money in Switzerland is undeclared. In all, KPMG reckons that tax evasion could represent up to 25% of Switzerland’s total private-banking market.

Still, just because there is a lot on the line doesn’t necessarily mean it’s time to hit the panic button. Typically some event happens which clearly signals a changing of the guard and that is the moment when people need to worry.

Such as this one.

Bank secrecy in itself cannot be a value proposition,” said Walter Berchtold, head of private banking at Credit Suisse, at a presentation recently. “It is important to clients, but the tax angle of it cannot be the driver.”

Swiss Banks Lose European Clients [WSJ]

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