Monday, August 17, 2009

Holy S#^T, UBS to Fink On 5,000 Account Holders

The deal initialed last week between the United States and Switzerland over UBS will involve the disclosure of around 5,000 holders of secret Swiss accounts, weekly newspaper NZZ am Sonntag said.

Ah, but the key:
It also formally leaves Switzerland's cherished banking secrecy intact, although many Swiss private bankers say it has been badly damaged.
Bottom line, as the late Harry Browne pointed out decades ago, the U.S. won't be able to muscle most Swiss private banks that don't have large direct U.S. holdings that can be threatened.

Further the reports says:

...account-holders threatened with disclosure would be able to challenge the move in the Swiss courts.
So it sounds like they will be tipped off in advance and can then take it, as a John Doe, through what they hope is a very slow Swiss court system.

All this said, Swiss private bankers appear not to be happy:

[The paper] quoted Konrad Hummler, partner in private bank Wegelin, as saying that Swiss banks would suffer from any further disclosure of customer data by UBS, even if in purely formal terms that did not breach Swiss law or banking secrecy.

"Everyone is talking about success -- the IRS, the Swiss government, UBS. But that can't possibly be the case," he said.

"Although we still don't know any of the details, we can guess some things: the customer has been made a fool of -- he was promised something which retroactively no longer applies," he said.

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