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Switzerland eases banking secrecy | Switzerland eases banking secrecy |
(20 minutes later) | |
Switzerland, the world's largest offshore financial centre, has agreed to accept concessions on bank secrecy. | |
However, while it will now abide by international rules on bank data sharing, it said it would only respond to "concrete and justified" requests. | |
The government added that it would still protect banking customers from "unjustified watching from abroad". | |
Switzerland's announcement comes after it had risked being added to a global blacklist of uncooperative tax havens. | |
This list currently comprises Andorra, Liechtenstein, and Monaco. | |
OECD talks | |
It is estimated that Switzerland's banks hold $2 trillion (£1.4tn) of global wealth held abroad. | |
WHAT IS A TAX HAVEN? Low or no taxationLack of transparencyRefusal to provide information to foreign tax authorities Source: OECD | |
It reached its agreement overnight with the Organisation for Economic Co-operation and Development (OECD), which sets rules on bank data sharing. | |
This is the first time it has agreed to sign up to the OECD rules, having previously stated that it would compromise its long-standing banking secrecy principles. | |
Andorra, Liechtenstein, Austria and Luxembourg have also just agreed to sign up to the OECD rules. | |
All had come under increasing pressure to reform their banking sectors. | |
Key global meeting | Key global meeting |
The agreements were announced ahead of a meeting of finance ministers and central bank governors from the G20 group of industrialised nations, which is due to start at a venue near London later. | The agreements were announced ahead of a meeting of finance ministers and central bank governors from the G20 group of industrialised nations, which is due to start at a venue near London later. |
The meeting is likely to focus on the need for tougher regulation of banks, and discuss increasing funding to tackle the crisis. | The meeting is likely to focus on the need for tougher regulation of banks, and discuss increasing funding to tackle the crisis. |
The Swiss government said in a statement that any exchange of banking information with other countries would be done on a "case by case" basis. | |
It insisted that the acceptance of OECD rules would not affect the country's basic banking secrecy principles. | |
Switzerland was "maintaining banking secrecy and resolutely refused all automatic transmission of information", it said. | |
"The private sphere of clients is still protected from unjustified watching from abroad," it added. | |
UBS row | UBS row |
It remains to be seen what impact the Swiss government's change of position will have on UBS and its continuing talks with US authorities. | It remains to be seen what impact the Swiss government's change of position will have on UBS and its continuing talks with US authorities. |
While UBS has given the US details of 300 American account holders, it has so far rejected a request to hand over details of 52,000 people in total. | While UBS has given the US details of 300 American account holders, it has so far rejected a request to hand over details of 52,000 people in total. |
US officials are investigating whether the 52,000 have been avoiding paying tax illegally. | US officials are investigating whether the 52,000 have been avoiding paying tax illegally. |
It is estimated that the US government loses $100bn in revenues every year because of tax havens. | It is estimated that the US government loses $100bn in revenues every year because of tax havens. |
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Should banks face tougher legislation on data sharing? Does this compromise client confidentiality? Send us your views. |