Swiss bankers slam London finance hub

Pierre Mirabaud points a finger at the British financial capital Keystone

The president of the Swiss Bankers’ Association has launched an attack on the City of London, calling it “a money-laundering paradise”.

Pierre Mirabaud criticised the financial capital for practising banking secrecy through the back door.

In an interview published on Monday with the Swiss newspaper, “Berner Zeitung”, Mirabaud singled out British trust law as the culprit.

This allows the people administering a trust to remain anonymous, which, according to the president, permitted London to carry out a banking secrecy of sorts.

The British Bankers’ Association, when contacted by swissinfo, said it viewed Mirabaud’s comments “with interest”.

“London has one of the best regulated banking sectors in the world,” said spokesman Brian Capon.

“Banks have stringent and enforceable anti-money laundering procedures in place and regulators require banks to undertake detailed ‘know your customer’ checks for every customer,” he added.

Farcical exchange

Mirabaud also described the exchange of information between authorities in different countries as a “farce”.

“Any investigations [into wrongdoing] by the authorities are fruitless because the [British] banks do not really know their clients,” said Mirabaud.

The opposite was true in Switzerland, said Mirabaud. Defending the country’s banking secrecy laws, he stressed that Swiss banks knew their customers well and the latter were entitled to their privacy.

Mirabaud’s comments come nearly a month after Switzerland signed a second set of bilateral agreements on the taxation of savings income, customs fraud and the Schengen/Dublin agreement governing security and asylum cooperation with the European Union.

But negotiations on the treaties – which are likely to be put to a nationwide vote next year – were punctuated by disagreements over Swiss banking secrecy.

After two years of wrangling, the two sides came to a compromise.

The Swiss agreed to impose a withholding tax on the savings of EU residents held in Switzerland; in return, the EU allowed the practice of banking secrecy to continue.

swissinfo, Faryal Mirza

Key facts

A trust is a legal instrument, containing a set of instructions that names an individual or institution responsible for distributing assets to beneficiaries.

In brief

The Swiss Bankers’ Association has dubbed the City of London a “money-laundering paradise”.

The British Bankers’ Association responded that its banks had stringent anti-money laundering procedures in place.