Chances are that any deal will go the same way as a similar one with Germany, with the Swiss government taxing interest earned on Brits’ savings and passing the money on to HMRC. It’s a departure from the current system, where Switzerland will only pass the on details of UK nationals’ bank accounts if the authorities already have all their account details – making it almost impossible for the taxman unless he already knows exactly what he's looking for (which, by definition, tends to be the problem). But after the G20 ordered a global clampdown on tax havens last year, Switzerland has begun relaxing its rules.
If that is the format that ends up being agreed, the only thing left for the two countries to discuss will be whether or not the tax is retrospective. The UK Government naturally wants to squeeze as much juice as it can out of people it sees as tax avoiders, but the Swiss have already made a statement saying any tax would only apply from the date the agreement is made. So there may stll be some manoeuvring on that one.
Privacy has always been of the essence for Swiss banks. The country's $20tr (£12.7tr) wealth management industry is built on strict laws preserving the identities (and activities) of its savers, so any changes now will be a pretty radical step. But in recent times, it’s had to fight off increasingly demanding requests from other countries for ‘automatic information exchanges’ – including one from the US which threatened a ‘potentially ruinous’ lawsuit if it didn’t hand over the information it required. Which it did, eventually.
So will all this political pressure affect their future profits? Well, there was no sign of it in UBS's results today - the Swiss bank, which was the one embroiled in that row with the US over tax-dodgers, has had another stonking quarter: it reported better-than-expected profits of 1.66bn Swiss francs (£1.1bn) for the three months to September, compared to a 564m francs loss during the same period last year. That's an impressive recovery, even if it does represent a slight slowdown from the 2bn francs profit it made last quarter. UBS CEO Oswald Gruebel says the bank remains ‘confident’ about the future – even, presumably, if it does start having to give up more information about some of its 'lower-profile' clients...