Credit Suisse to set up US 'bad bank': reports

AFP/The Local
AFP/The Local - [email protected] • 6 May, 2014 Updated Tue 6 May 2014 13:28 CEST
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Credit Suisse, facing potential criminal charges for helping Americans dodge taxes, has created a "bad bank" unit for US clients, Swiss media reported on Tuesday.

According to Swiss daily Tages Anzeiger, Switzerland's second largest bank aims to drop all funds belonging to US citizens not residing in Switzerland, into a newly created bank called CS International Advisors AG, headquartered in Zurich and with its own separate banking licence.
The bank has reportedly been informing its off-shore US clients of the shift in recent days.
Credit Suisse did not immediately respond to requests for comment on the report.
According to Tages Anzeiger, the new bank is meant to shoulder the lion's share of the burden if Washington decides to press criminal charges and drag Credit Suisse to court.
Peter Kunz, an economy professor at the University of Bern, told the daily that Credit Suisse could expect the consequences of any future litigation to be "a bit less serious" for the whole group once it implements the new system.
A senior US official told AFP on Monday that the probe of Credit Suisse's past practice of helping its wealthy US clients evade taxes by sheltering their funds abroad was almost complete and that criminal charges could be brought within "a few weeks."
And the Wall Street Journal reported that Credit Suisse was about to reach an agreement with the Justice Department that would see it plead guilty and pay a $1-billion fine.
In 2009, Switzerland's largest bank UBS was forced to acknowledge it had used Swiss banking secrecy laws to help its US clients avoid paying taxes at home, and had to dish out a $780-million fine to US tax authorities.
Credit Suisse has put aside $895 million Swiss francs ($1.0 billion) to cover any US potential fine.
A damning Senate report found that the bank at its peak in 2006 had more than 22,000 US customers with Swiss accounts whose assets stood as high as $12 billion — mainly undeclared to US tax authorities.
Chief executive Brady Dougan apologized in February to US senators for the bank's actions, conceding it had undertaken elaborate efforts to gain new, secret American clients, but blamed the wrongdoing on a small band of rogue employees.



AFP/The Local 2014/05/06 13:28

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