Switzerland will meet some of the demands laid out by Washington and release additional client information after a tax row between the two countries.
The Swiss banking system has thrived for decades on its banking secrecy policy. Today, the U.S. government is demanding that information of U.S. client accounts worth over $50,000 over the last 10 years be handed over. This affects big banks like Credit Suisse and Julius Baer, with the disputed figures amounting to about $30 billion, raising the stakes too high for the Swiss banking system and could force the Swiss government to intervene.
According to a Reuters report, Switzerland is resisting reverting to emergency law as it did to settle a U.S. investigation against UBS when it bent strict bank secrecy laws to reveal details of some 4,450 UBS clients to avoid criminal charges.
Swiss Finance Minister Eveline Widmer-Schlumpf said on Monday Switzerland would not deliver detailed client data by Tuesday, she said: "That would mean applying emergency law and we're not applying emergency law here."
"We have suggested to the Americans how to solve (...) the problem," she said, explaining that a solution would have to be based on existing fiscal agreements between the US and Switzerland, or on recent agreements with Germany and the United Kingdom.
"I am against ultimatums. This is no way of dealing with other states," she told Swiss television.
Mario Tuor, a spokesman for the Swiss department for international financial affairs, told the Swiss daily TagesAnzeiger: "A possible exchange of client data should take place within the framework of existing laws."
Several Swiss politicians have said that the country should not succumb to U.S. pressure. "The move of the U.S. is unacceptable," Swiss parliamentarian Bruno Frick, a Christian Democrat, told Swiss daily TagesAnzeiger. Philip Mueller, from the business-friendly Swiss Radical Party, criticized the U.S. approach but also said the banks have to comply with the law.
Another assault on Swiss banks could result in hefty fines and hurt asset flows into Switzerland, analysts told the Wall Street Journal.
According to Boston Consulting Group, Switzerland is the world's biggest offshore financial center, managing assets valued at $2.1 trillion last year. Besides being home to banking giants such as UBS and Credit Suisse, several hundred smaller, private banks do business in the country.