Sunday, January 31, 2010

Swiss Justice Minister: UBS in Danger of Collapse

Uh oh...

Swiss bank in danger of going under (1/31/2010

"The top Swiss bank, UBS, could collapse according to Switzerland's justice minister.

"Eveline Widmer-Schlumpf has told Le Matin Dimanche newspaper that sensitive talks with the United States are proving to be very problematic, as they deal with high-profile tax fraud.

"She warned the actions of UBS in the United States would threaten all of the bank's activities if its licence were to be revoked in the United States.

"While Switzerland and the US had negotiated an agreement, under which UBS would hand over information on some 4,500 account holders to the IRS, a Swiss court ruling earlier this month has put the deal in doubt.

"Meanwhile, the president of the Swiss confederation Doris Leuthard has warned foreign governments not to pay for illegally obtained information regarding holders of Swiss savings accounts.

"Ms Leuthard made her remarks after the German newspaper Frankfurter Allgemeine said an informant had offered to sell the data of 1,500 account holders to the German tax authorities for 2.5 million euros.

"The information would reportedly allow the German authorities to collect over 200 million euros in evaded taxes from UBS account holders.

"Secrecy has been a feature of bank dealings in Switzerland for many years, with many citizens now accusing the government of failing to protect UBS."

In early January, the federal administrative court of Switzerland ruled that the Swiss Financial and Market Supervisory Authority (Finma) abused its power when it ordered that details of 285 account holders suspected of tax evasion in the US be sent to Washington. ("Court rules UBS data transfer to US illegal" 1/8/2010

Why did the Swiss authority and UBS relent to the U.S. pressure? Because the pressure was from Internal Revenue Service, which is supervised by Treasury Department which is headed by a tax-cheating Timmy Geithner. Oh that's scary. So the Swiss abandoned the best selling point of their banking system to get IRS off the back, only to be ruled by their own court that their action was illegal.


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