History comes full circle on Swiss

Weary Swiss bankers tried to contain another onslaught that shook the remnants of the lucrative wall of secrecy they have been struggling to maintain against Europe and the United States (U.S.).

However, their minds were increasingly set on growing business with Asia and emerging markets.

“Banking secrecy is being called into question,” admitted the secretary general of the Swiss Private Bankers Association, Michel Derobert.

“It is important for past clientele, and it's losing its importance for the clients of the future,” he said.

Swiss banks were legally sworn to secrecy over their clients' affairs in 1934, as a wave of espionage by Germany's then Nazi regime against Germans — including Jews and political opponents — with deposits in Switzerland added to other tensions of the era.

Although nobody in Switzerland is making comparisons with 1930s Europe, an anonymous whistleblower's recent offer to German authorities — thought to be the third leak in two years — annoyed the banking establishment and fuelled domestic doubts about the value of secrecy.

The Swiss Bankers' Association condemned the German decision, claiming that Germany was turning into “a receiver of stolen goods” and testing good neighborly relations.

“It's part of their strategy not to name the bank, to keep people worried,” said James Nason, a spokesman for association.

At least one bank in Zurich reportedly faced a flurry of calls from German customers.

Germany has been in the forefront of European pressure on Switzerland to counter tax evasion in recent years.

That was followed by the G20 group of leading economies last year, which forced the Swiss to water down secrecy and bolster cooperation.

“Banking secrecy no longer has a future. It has run its course,” German Finance Minister, Wolfgang Schaeuble, told the Saturday edition of Sueddeutsche Zeitung newspaper.

“It is obviously not an easy decision for Switzerland. Banking secrecy is a part of its state tradition,” he said. “But international cooperation changes national traditions. Switzerland finds itself in this process of change.”

Whistleblowers have amplified the pressure.

Information from a former UBS banker arrested in 2008 formed the backbone of multi-million dollar U.S. government litigation last year that obliged the Swiss bank to hand over details on some 4,500 suspected tax dodging U.S. offshore clients.

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