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Disaster in US affected Swiss business

The Swiss Bankers Association has said terrorist money does not come colour coded

(Keystone Archive)

The aftermath of the terrorist attacks in New York and Washington continued to have a major influence on Swiss business over the past week. Insurance and aviation companies were particularly affected.

Switzerland's finance minister, Kaspar Villiger, defended Swiss banking secrecy laws on Thursday and pledged to join international efforts to search for money linked to terrorism.

"Switzerland is definitely not a safe haven for criminals nor terrorists, and the country's banking secrecy system provides no protection for such people," Villiger said at a news conference.

His comments came after Britain's chancellor of the exchequer, Gordon Brown, said Switzerland must ensure that banking secrecy did not impede the search for terrorist funds.

Bank account frozen

Villiger announced that one bank account possibly linked to the US terror attacks had been frozen in a Swiss investigation.

However, he said, "the measures taken so far...have revealed no indication that Osama bin Laden (the United States' prime suspect) and his terrorist organisation have any funds in this country.

At the Swiss Bankers Association in Basel, there was frustration that Switzerland's name had once again been mentioned in connection with dirty money.

"We cannot emphasise enough that the high level of confidentiality that Swiss banks offer their customers does not and never will protect terrorists and their financial transactions," commented spokesman James Nason.

"When a crime is being investigated, the judicial authorities have complete and unlimited access to information in the banks so it's an absolute myth to believe that there's this monolithic banking secrecy that protects criminals," he added.

Market investigation

Earlier in the week, Switzerland joined financial market regulators around the world in exchanging information surrounding the terror attacks. They are investigating of the organisers tried to profit by selling shares or stock options before the event.

"We don't have any evidence, only the public speculation," said Urs Zulauf, chief legal expert of the Swiss Federal Banking commission in Bern. "But the matter is serious enough that we wanted to become active."

In another development, the Swiss Reinsurance company of Zurich, said it faced an after-tax burden or around SFr2 billion ($1.25 billion) after last week's suicide attacks on the US. The company had previously forecast payouts of around SFr1.2 billion.

A statement added that the company was still undecided how and to what extent large loss reserves would be used to cover the amount. The estimate corresponds to around two-thirds of the firm's annual profit last year.

Helping Swissair

Pressure mounted in Switzerland on the government, and even the banks to help the embattled Swissair Group in its fight for survival.

The Swiss finance minister, Kaspar Villiger, said on Friday that the confederation might help Swissair by taking part in a capital increase. But the aid would be only "subsidiary" because it was first and foremost up to the private economy to inject funds to assure the company's survival.

The government has a three per cent stake in the Swissair Group and Villiger said any state intervention would have to be in line with that fact.

Calls for some kind of financial support became louder when it became apparent that the US government was preparing to give state aid to its airlines, which are staggering from the effects on their business of the hijackings.

Swissair, which is reeling from a loss of SFr2.9 billion last year and first half losses of SFr234 million, said on Thursday that it estimates revenue losses at about SFr65 million for the past week.

The company said it was now looking at measures needed to improve its financial position, prompting fears of additional job cuts. It already announced 1,250 job losses last month as part of attempts to return to profitability.

Swissair spokesman Rainer Meier said bankruptcy was "out of the question", although Swiss aviation journalist Sepp Moser told swissinfo on Monday that the group was "on the verge of collapse".

In other news, the Sulzer Medica medical technology company reported on Wednesday a first half loss of SFr608 million, a figure which includes provisions for a class settlement of US lawsuits arising from faulty hip implants.

The company, based in Winterthur, said the problems connected with the faulty products would require substantial payments to the patients concerned and that company earnings over the next three to five years would be affected.

swissinfo with agencies


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