GENEVA - FOR more than 60 years, the Swiss have nurtured banking secrecy to the extent that it has become an unshakeable part of Switzerland's image like chocolate, watches, cowbells and Heidi.But many bankers, lawyers and analysts in the country believe a deal struck with the United States to relieve pressure on the flagship bank, UBS, has blown a hole in the wall of secrecy, even if it remains enshrined in Swiss law.
'The UBS disaster is a catastrophe for the Swiss financial centre... because everyone will rush for the breach,' said Mr Patrick Segal, director of Edmond de Rothschild Private Bank.
Unlike most major economies, banking secrecy grants account holders in Switzerland complete privacy, keeping their banking details out of bounds for any authority - even the Swiss taxman.
It can only be lifted for legally-sanctioned investigations into criminal offences, and that, under local law, rules out the lesser offence of tax evasion.
Last Wednesday, the Swiss and US governments revealed their 'treaty' settlement to end a lawsuit against financially-troubled UBS over charges that its bankers used Swiss secrecy to help US taxpayers fraudulently evade taxes.
While Swiss President and Finance Minister Hans-Rudolf Merz described the deal as a 'win-win situation' for both states, the details set off alarm bells in the industry.
It included an arrangement to disclose details on an unprecedented number of UBS accounts - 4,450 - through an established process to deal with tax fraud, which is regarded as a crime in Switzerland.
But the scope was tantamount to a 'fishing expedition' that used to be frowned upon in the Swiss rulebook, setting a new precedent, experts warned.
'Nobody can see legally how... this treaty wouldn't apply to other banks,' said lawyer Enrico Monfrini, who helped Nigeria recover hundreds of millions of dollars hoarded abroad by late dictator Sani Abacha. -- AFP
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