• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

N.S. Vageesh

CHENNAI, Dec. 6

THE Chairman of a top Swiss bank is sweating. The Nigerian Finance Minister has just pulled out a pistol and is threatening to shoot him if he did not reveal the names of Nigerians holding accounts in his bank. But the chairman does not buckle even at the point of death. In a dramatic twist, the Finance Minister removes the pistol and enquires about how he can open an account with the bank with the 5 million dollars in his bag!

That was a brief episode from a Jeffrey Archer collection of short stories (A Twist in the Tale). Fiction it may have been, but the story best captures the Swiss devotion to the principle of banking secrecy. May be it ought to be read by some of the European Union negotiators who have been trying to pressurise the Swiss to change their banking secrecy laws and reveal more information in an attempt to crack down on tax evasion and cross-border flows of money. The agencies report that a two-hour meeting in Zurich between the EU and the Swiss remained deadlocked.

Even prior to the September 11 attacks, various countries have been trying to find a solution to the problem of money laundering and tax evasion and targeted Swiss banks in this regard. Global outrage over terrorist activities has only added to the shrillness in the debate about whether the Swiss should break their long tradition - which some observers say is a pillar of their economy.

Talks between the EU and the Swiss have broken down again because the Swiss have refused to give these countries access to information about the accounts in their banks unless there is sufficient evidence of tax fraud. Agencies report in the last two days that the Swiss have offered to have a 35 per cent withholding tax on income from EU residents' savings and to share the revenues with the EU. But other EU nations are not biting and the deal has fallen through.

One top former central banker in India says that the Swiss who were renowned for their prowess in chocolates, watches and numbered accounts were subject to competition in the first two segments. "They are unlikely to let go of numbered accounts, which is really their last bastion of survival."

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
Parent to buy 49 pc Atlas Copco shares

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line