UBS has finally agreed under an agreement to pay USD 780 million to US Govt and admitted to evasion of US taxes by actively suggesting to US citizens/clients to 'hide' money in Switzerland over the years. Now, more than 19,000 clients, including Canadian citizens, have been impacted and their names will be disclosed to the US Govt shortly.
Swiss banking, as the article states, was for many centuries clearly the leader in the secretive swiss banking for the rich and famous and of course, the connected and 'in the know'. However, with the financial landscape changing dramatically in 2008, with the demise of Lehman, Bear Stearns, many US and non US banks, Merrill Lynch etc, now it is the turn of European banks to have grave financial problems in 2009. Iceland has had its share, now UK is going through bailouts and assistance from the Govt and leading banks such as Lloyds have been downgraded from their esteemed Aaa status by Moody's. Barclays, RBS and HSBC are under pressure although I rate HSBC to be the least impacted due to their conservative nature and large client base, however, same cannot be said for Barclays and RBS among other smaller banks. HBOS is already gone and various European banks including in France and Eastern Europe are declaring large losses.
Clients are shifting assets from the rapidly falling financial institutions, but the million dollar question is: Which banks are safe?
Banks in Far East, lately with the exception of HK, are safe along with state supported banks in the Middle East, India continues to be a safe haven. In Latin America also the banks that are doing fine.
The banking crisis which is part of the larger financial crisis is kind of restricted to banks and countries that allowed high leveraging without effective regulatory oversight in US UK, Europe only. Most other nations, thus far, do not have had to cope with failing banks since their respective central banks were sitting awake at the switch.
While UBS continues losing its star bankers and its stature along with the lustre of swiss banking secrecy that attracted billions of dollars to its doors. Now Switzerland must act, because Singapore, Dubai and London are the recipients of the money sloshing around.
Can you hear the ching-a-ling of the new financial landscape of 2010 and onwards?
A Swiss Bank Is Set to Open Its Secret Files
By LYNNLEY BROWNING
Published: February 18, 2009
UPDATE:
9.07PM, Dubai
Barely I have penned my thoughts that two different writers, write exactly the same things:
1. that Swiss banking secrecy may come to an end
2. that Singapore has already announced tax incentives for fund houses etc to relocate to Singapore
20 February 2009 - David Bain
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