Game changer: Swiss banks ditch secrecy

Game changer: Swiss banks ditch secrecy

Switzerland, the world’s largest offshore wealth center, worth an estimated $2.2 trillion in assets, has signed an agreement to share financial information with nearly 60 other countries, which could completely change the country’s financial landscape.

               

The country has made a giant leap towards banking transparency   after it signed a convention with the Organization for Economic   Cooperation and Development (OECD) agreeing to exchange data with   60 member countries.

Switzerland already has bilateral tax collection agreements with   the UK and Austria, but the move to chip away another layer of   the country’s infamous banking secrecy was prompted by   international pressure from the US, Germany, and France,

The tax agreement, called the Multilateral Convention on Mutual   Administrative Assistance on Tax Matters came into force in 2010,   and includes all G20 states, and most European states. The convention   requires participants to pool tax collection information, and   includes automatic exchanges, in some cases.

Under the convention, the Swiss government can call on large   private banks like UBS AG, Julius Baer, and Credit Suisse Group   AG to turn over confidential information to international tax   watchdogs.

The crackdown on the tight-lipped policy could cost the Swiss   business, as the new policy may be a turn-off for foreign banks.   At the beginning of 2012, 145 foreign banks had offices in   Switzerland, and as of May 2013, 16 had left, according to data   from the Association of Foreign Banks in Switzerland.

Between 2008 and 2012, foreign bank assets decreased by $921   billion, as tax evasion eroded and clients withdrew money.