UBS CEO calls attacks on Swiss tax “economic war”

ZURICH (Reuters): Attacks on Switzerland as a tax haven constitute an “economic war” by rivals who want to hurt the country’s big banks and its strength as a financial centre, UBS Chief Executive Sergio Ermotti was quoted as saying on Sunday.

“Switzerland has been attacked since 2008. We are in the middle of an economic war,” Ermotti told the SonntagsZeitung in an interview. “The goal is to weaken the financial centre of Switzerland.”

“It’s about weakening the two big Swiss banks which are internationally successful... Not only foreign politicians but also our competitors around the world have an interest in the attacks on Switzerland.”

Ermotti, a Swiss citizen who took over as CEO at UBS last year, said attacks on Swiss bank secrecy - which has helped the country build up a $2 trillion offshore financial sector - had political as well as economic motives.

This is the first time a top Swiss bank executive has made such outspoken remarks against the tax claims on Swiss banks. In the past, Swiss bank bosses have kept their heads down.

He said that an investigation launched recently in France into allegations that the bank helped French clients dodge taxes was being misused in the presidential election campaign.



“Politicians want to cash in the taxes. But it’s about more than that: Switzerland is a very successful island internationally with low interest rates, low taxes and attractive banks. Many people abroad don’t like that,” he said.

UBS was forced to pay a fine and release the names of 4,500 clients in 2009 to settle U.S. charges it helped wealthy Americans avoid taxes through secret Swiss accounts.

The United States is now investigating eleven other Swiss banks including Credit Suisse on similar charges.

The SonntagsZeitung said the U.S. authorities have also started investigating the first Geneva-based bank, one of the big partnership private banks, but could not confirm which one.

Talks between senior U.S. and Swiss officials aimed at settling the tax dispute led to no breakthroughs, Swiss President Eveline Widmer-Schlumpf said on Saturday, adding she hoped for a deal before the end of the year.

Switzerland is trying to get the investigations dropped in return for the payment of fines and the transfer of U.S. client names. It is also seeking a deal to shield the remainder of its 300 or so banks from U.S. prosecution.

Walter Berchtold, chairman of private banking at Credit Suisse, has secured immunity from U.S. prosecution after voluntarily cooperating with U.S. investigators, Der Sonntag newspaper reported, citing unnamed sources. Credit Suisse was not immediately available for comment.

In an attempt to display their cooperation, several Swiss banks - including Credit Suisse, Julius Baer, Zuercher Kantonalbank and Baseler Kantonalbank - have handed over documents on their U.S. offshore business, including names of employees, NZZ am Sonntag reported, citing unnamed sources.

Meanwhile, Switzerland has recently struck agreements with Germany, Britain and Austria to allow bank clients from those countries to pay their home country taxes without their identities being revealed.

UBS boss Ermotti said politicians had underestimated the impact of these deals, which he said could mean Switzerland loses 20-25 percent of client assets, ultimately leading to a wave of consolidation and the loss of some 20,000 banking jobs.

“Many customers want to diversify their wealth away from Switzerland to other financial centres like Singapore, London or Miami. When the assets are gone then the jobs will also disappear,” he said.