Christian Science Monitor

Wednesday’s agreement by Swiss bank UBS to divulge details of 4,450 accounts to the US Internal Revenue Service has put a crowbar into the door of Switzerland’s long tradition of bank secrecy. But it’s just a small opening. The amount of global wealth stashed in tax-haven nations is staggering and largely uncontrolled, financial experts say. Here’s a brief backgrounder:

How did Switzerland become bank-secrecy central?

Maintaining a strong record of client confidentiality helped to pave Switzerland’s way to financial success, becoming a lure for financial assets. Coupled with the Swiss franc’s reputation as a reliably firm currency, this has made Zurich a world banking center – with UBS and Credit Suisse among the best-known firms. The tradition of secrecy gained a firm legal rooting in 1934, as part of broader Depression-era bank regulations. Under the provision on secrecy, bankers could face criminal sentences for divulging client information.

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This entry was posted on Thursday, August 20th, 2009 at 2:22 pm and is filed under Media, News, Task Force in the News.