Swiss banks square up for battle to defend banking secrecy

Urs Roth (left) and Georg Krayer made it clear that banking secrecy was not negotiable Keystone

The Swiss Bankers Association has made it clear that it will fight to defend banking secrecy in the face of European Union pressure. Brussels wants Swiss banks to reveal information about assets belonging to EU nationals.

Speaking at a news conference in Zurich, the Association’s chairman, Georg Krayer, said Switzerland had to defend its interests as a financial centre against “all-too-transparent demands” from the EU.

EU countries are seeking to prevent their citizens from investing abroad without declaring income interest to tax authorities. In particular, they are seeking ways to exchange information, which would breach Swiss banking secrecy.

“We are not prepared to accept… demands which impose unnecessary administrative burdens or simply do away with the respect, developed over centuries, for our clients’ right to privacy in money matters,” Krayer said.

He added that the EU’s demands “seem to a large part to be motivated by a desire for competitive advantage”.

In a conciliatory note, he said Switzerland understood the EU’s concerns, and that a common ground could be reached without compromising banking secrecy. “We do acknowledge the EU’s aim to keep a significant part of taxable funds within its borders, but we think there is room for a solution on common ground.”

The Association’s chief executive designate, Urs Roth, said that in Switzerland, tax evasion was prevented primarily by means of a withholding tax, which ensured that taxes were collected without violating clients’ rights of privacy.

“By modifying the existing withholding tax, it would be possible to introduce in Switzerland a measure for the prevention of tax evasion deemed ‘equivalent’ by the EU,” he said.

On other issues, the Bankers Association explained that it was opposed to the so-called “Yes to Europe” initiative, which calls on the Swiss government to open immediate membership negotiations with the EU. Swiss voters will cast their ballots on the proposal on March 4.

The Association argued that the timing was wrong. “As bankers, we know that success is determined by the right timing. But the initiative seeks to impose a schedule on the government, which would be responsible for the process of integration. To our minds, this is a fundamental mistake,” Krayer said.

However, he said the Bankers Association was in favour of better integrating Switzerland into the international community, and that it had supported Swiss membership in the United Nations more than two years ago.

“We consider UN membership not to be a renunciation of Swiss tradition but a necessary step towards a normalisation process,” Krayer added.

swissinfo with agencies