Swiss banks 'ban travel' for bosses

Secrecy concerns mean Swiss banks have apparently banned top executives from travelling. Are they overreacting?

Last Updated: 31 Aug 2010

Private banks in Switzerland are stopping their executives from travelling, amid fears they’ll be detained under the global crackdown on secrecy rules. One banker has said that travelling to Germany or France to deal with clients could see him questioned by local police, a risk neither he nor his employer is willing to take.

As a reaction to the current attack on tax evasion and secrecy in the banking industry, it seems a touch paranoid. The bankers are hardly going to end up in orange jump suits in Guantanamo Bay after all. But it does indicate the extent of bankers’ concern. European nations and the US are targeting tax evasion as they look to claw back some much-needed cash during the recession, and small states that have made a name for themselves as cushy tax havens are in the firing line.

Several countries, including the likes of Lichtenstein, Austria and Luxembourg, have begun to open up their private banking industry under severe pressure from larger countries – albeit reluctantly. Even famously ‘ask no questions’ Switzerland is sensing the change in international mood, and has offered to provide more transparency.

Exactly what this will mean remains to be seen, but Swiss banks may come under further attack during next week’s G20 meeting. The big guns have made it clear this time they’re serious and want to ‘blacklist’ countries considered to be tax havens. Fine, but then what? Businessmen are hardly going to transfer their accounts into the local branch of HSBC or RBS.

But might the Swiss be going over the top? If they are, it’s perhaps not surprising given the recent experience of UBS. It agreed to pay a whopping £550m fine to the US tax authorities, rather than face the courts over its role in a huge tax evasion scam. The US authorities were raring to press charges as part of their efforts to crack down on $18bn they suspect is being hidden in secret offshore accounts there. No doubt there are plenty of other Swiss banks worried they could be next on the hitlist, and don’t want their executives getting caught in the crosshairs while on an international trip.

It’s particularly ironic since the Swiss can at least afford foreign travel – the Franc is bearing up pretty well at the moment. But what will they do with all that extra time on their hands now they are forced to stay at home? Scoff chocolates and go skiing, perhaps. Or they could try thinking up clever ways to fix the financial crisis. Answers on a postcard please.

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