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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: afrayem onigwecher who wrote (9768)	5/1/2002 7:59:33 PM
From: Sir Auric Goldfinger	Read Replies (3) \| Respond to of 19428

For once, you have told the truth.

To: afrayem onigwecher who wrote (9768)	5/2/2002 10:43:58 AM
From: StockDung	Respond to of 19428

Smell of fear as Swiss bank secrecy on shaky ground By Karen Iley GENEVA, May 2 (Reuters) - Bankers may scoff, but there is no escaping the reality that banking secrecy, the cherished foundation of Switzerland's trillion-dollar wealth management industry, is on shaky ground. Fears that bank secrecy may disappear have snowballed of late with the pressure even coming from within the Swiss government. Some cabinet members are apparently willing to soften the rules to improve ties with the EU. Polls show the man on the street is scolding the practice for protecting tax cheats. That adds to the usual Swiss battering -- "tax haven" finger-pointing from the European Union and the Organisation for Economic Cooperation and Development (OECD), the threat of amnesties to lure tax dodgers' money home, and a stubborn suspicion that the rules can help mask terror funding. Bankers are putting a brave face on the erosion and insist they won't give up without a fight, but their frantic efforts to build up onshore operations elsewhere prove they recognise it would be folly to rely purely on client privacy rules. "They all know it's not going to last forever but they think while it lasts and while they're still making good money, it's worth a fight," said one bank source who requested anonymity. The main threat now comes from the EU, under pressure to harmonise cross-border taxation by the start of 2003. In a bid to ensure its residents pay tax at home, the EU wants member countries, plus others including Switzerland, to exchange information on residents' savings income. Switzerland says that would ruin its bank secrecy code and has instead offered to levy a withholding tax on interest income which it would repay to the country in question. Banque Sarasin Chairman Georg Krayer recently told the HandelsZeitung newspaper that exchanging information with foreign tax authorities was politically "unthinkable." Switzerland was "not prepared to be the tick on the belly of the EU," he said. Economy Minister Pascal Couchepin joked that while the Swiss constitution would not begin "In the name of God and bank secrecy," the rules would not be sacrificed. But for all these dramatic assertions, bankers privately have lost confidence in what they see as feeble negotiators who seem ready to accept the EU's demands in return for winning accords on such matters as police and immigration cooperation. "Our people have never been any good at negotiating and they're not getting any better," said one bank source. Bankers fear the apparent willingness to loosen secrecy and swap information on suspects and alleged crimes in the case of indirect EU taxes -- particularly on customs fraud -- could prise open a can of worms over what is criminal and what is not. CATASTROPHIC IMPACT? Few -- and especially not bankers -- are willing to say how much money could exit Switzerland should bank secrecy disappear. Bankers argue it would be better for the EU to have Swiss cooperation on withholding tax level rather than no cooperation at all, unsurprising given that is also the lesser of two evils for them, costing more in time and effort than in lost revenue. If, however, the EU wins in its fight to get the full client details, that would be a more serious matter. "Due to the loss of trust and discretion, I expect large capital outflows if there is an exchange of information," Krayer said. "It is clear to me that the climate for Swiss banks would worsen substantially." On the other hand, gutting bank secrecy would speed up consolidation and lead to a leaner and fitter financial centre built around Switzerland's international expertise. "In local banks, where 50 percent of their assets may be here because of taxes, does it mean that if bank secrecy is lifted all those clients will take their money and run? I don't see why," one banker said. "Some might, but where would they go? Nauru, Tonga? I don't think so." (Additional reporting by Michael Shields in Zurich) 05/02/02 10:20 ET