Shares up; Swiss bankers hire US lobbyist
Zurich, Switzerland (GenevaLunch) - It may be no more than rumour based on several unnamed sources being cited, but the financial world is now expecting the Swiss and US governments to sign on Wednesday an agreement involving Swiss bank UBS. The bank’s shares have continued to climb most of this week, reaching the level they were at in December 2008 before the bank agreed to hand some names to the IRS tax authority, in early February. UBS shares closed in Zurich at CHF16.90 Tuesday 19 August.
Once the agreement is signed by both parties, details can be released. Widespread speculation by industry observers and media has UBS delivering some 5,000 clients’ details to the IRS, but the figure could take on a new aspect with the IRS specifying Tuesday 19 August that it is now investigating for criminal activity 150 of the 252 client names provided to it by the bank in February 2009.
Bloomberg reports that acting US Attorney Jeffrey Sloman noted the numbers in a memo recommending leniancy for Bradley Birkenfeld, former UBS manager in the US, who will be sentenced 21 August. Birkenfeld pleaded guilty to conspiracy charges and he has cooperated with US investigators.
Several international media have also picked up on a statement variously attributed to Swiss President Hans-Rudolf Merz or an unnamed source (in Blick) that the government wants to sell sooner rather than later the UBS shares it took on as part of the government bailout at the end of 2008. The source was reiterating several earlier statements that the federal government has no interest in holding the shares long term. It will sell them to private investors rather than via the market.
Meanwhile, the Swiss Bankers Association has decided to “beef up” its image in Washington and on Wall Street, with the IRS stepping up its activities abroad and Congress considering legislation that would touch foreign banks, writes Martin Vaughan in a Wall Street Journal blog. The Basel-based group has hired Candida Wolff, a lobbyist for US President George W Bush, who is a partner at US law firm Hogan and Hartson. Vaughan notes: “US public opinion of Swiss banks has been suffered as US law enforcement authorities have waged an unprecedented legal battle to get the identities of thousands of American clients of UBS AG.”
Related: Chicago Tribune, US