Geneva, Switzerland (GenevaLunch) – Money has not been flowing out of Swiss banks in a significant way as a result of the government’s decision in March 2009 to ease its strict interpretation of banking secrecy,  “There has been no meaningful outflow of assets” from Swiss banks since Switzerland said it would adopt Art. 26 of the OECD (Organisation for Economic Cooperation and Development) Model Tax Convention, says Pierre Mirabaud, president of the Swiss Bankers Association. The convention obliges Switzerland to renegotiate tax treaties with other countries.

Mirabeau, speaking to the American International Club of Geneva 27 May, said the main factor that will lead to Swiss banks regaining trust is for them to begin to be profitable again. Asset values have dropped across the board because of very poor market conditions since the onset of the crisis late last year, but this has affected all banks.

He noted that 40 percent of private banks in Switzerland are foreign-owned.

Switzerland’s legal distinction between tax fraud and tax evasion has come under heavy criticism from other countries in the European Union and the United States. The OECD standards call for Switzerland to exchange information with other governments in individual cases where “a specific and justified request has been made” for any form of tax offense. Other countries that have agreed to adopt OECD standards include Liechtenstein, Luxemburg and Singapore, traditional competitors to Swiss private banks.

Background: “Switzerland accepts OECD standard on tax help, insists on privacy rights,” Geneva Lunch, 13 March 2009

You can leave a response, or trackback from your own site.