• Switzerland's news in English
More Swiss banks face Credit Suisse ordeal
Photo: AFP

More Swiss banks face Credit Suisse ordeal

AFP · 21 May 2014, 11:10

Published: 21 May 2014 11:10 GMT+02:00

Facebook Twitter Google+ reddit

Late Monday, Switzerland's second largest bank pleaded guilty to conspiracy and aiding in tax evasion and agreed to pay a whopping $2.6 billion in fines to US authorities.
This marks by far the highest penalty ever imposed on a Swiss bank, and is more than three times the $780-million fine Washington in 2009 slapped on the Alpine country's biggest bank, UBS, which unlike Credit Suisse was not required to plead guilty to settle a similar dispute.
While the treatment of Credit Suisse may appear harsh, the bank itself voiced relief that the issue had been settled and the burden of uncertainty that has weighed on it for months had been lifted.
"We have worked very hard to get this business fixed and cleaned up," chief executive Brady Dougan told reporters in a conference call on Tuesday, adding: "I think we've done a pretty good job with that."
Most important perhaps was that the bank will be permitted to continue operating in the United States without fear of losing its license.
"It's certainly a good deal for Credit Suisse," Swiss business lawyer Douglas Hornung told AFP.

This has been dragging on for too long, and (the bank) was afraid, with justification, that it would no longer be operational in the United States," 

Aware that it faced a huge legal penalty, Credit Suisse had already set aside almost $1 billion to cover eventual costs, and while the towering penalty will still sting, Hornung and other observers said it was nothing the bank could not handle.

 'Will quickly blow over'

Story continues below…

"We remain convinced that this will quickly blow over, as similar large fines have been levied on other banks," Helvea analyst Tim Dawson said in a note, mentioning UBS as an example.
Taking into account its provisions, Credit Suisse has said it will book an additional after-tax charge of 1.59 billion francs in its second quarter accounts.
Swiss Finance Minister Eveline Widmer-Schlumpf hailed the settlement, telling reporters Tuesday she was "very happy" that a solution had been found, and that she hoped it would be possible to quickly settle the disputes with other Swiss banks as well.
Credit Suisse was one of 14 Swiss banks under criminal investigation by the US Justice Department on suspicion they helped wealthy US clients hide billions of dollars in assets from tax authorities.
The so-called "category 1" list also includes private bank Julius Baer, as well as the cantonal banks of Zurich (ZKB) and Basel (BKB).
Widmer-Schlumpf stressed that each of the banks would individually negotiate separate settlements, and that the fine imposed on Credit Suisse should not be seen as an indicator of what they had coming.
ZKB also told AFP in an email that "this settlement does not allow any conclusions for the other Swiss banks in category 1," stressing that "each case is different and will be looked at individually."
Hornung however said the Credit Suisse case should be seen as a clear guide to which way the wind would blow for the others.
"The Americans are quite logical. I can't imagine that for the other banks in category 1 the treatment would be very different," he said.
A damning US Senate report earlier this year found that Credit Suisse -- one of the world's biggest wealth managers -- 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.
Bank chief executive Dougan, meanwhile, told the committee the amount was closer to $7.0 billion at its peak.
The penalties against the bank, which when counting a $196-million fine to the Securities and Exchange Commission in February amount to $2.8 billion, thereby adding up to about 25 percent of the undeclared funds it managed, Hornung pointed out.
"That's not so bad in the end," he said, speculating that the other banks would likely be fined somewhere between 20 and 30 percent of the peak amount of the undeclared funds they had managed.
"Credit Suisse has set a precedent," he said.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Montreux throws hat in Olympic rings
Could Montreux host the 2026 Games? Photo: Ivo Scholz/Swiss Tourism

Montreux is to put itself forward as the host city for the 2026 winter Olympics as part of a potential bid by the cantons of Valais and Vaud.

Geneva car share scheme could help reduce city traffic
Catch a Car is aimed at short hops within a city. Photo: Catch a Car

Catch a Car, already in Basel, launches in Geneva next month.

Swiss women will ‘work for free’ for the rest of year
Female employees in Switzerland earn 19.3 percent less than their male colleagues. File photo: Randy Kashka

Switzerland's gender pay gap means from today, Friday October 21st, women in the country will effectively be working for free for the rest of 2016.

Swiss luxury watches stolen in Paris raid
Police outside the Girard-Perregaux watch store on Thursday. Photo: Bertrand Guay/AFP

The 10 Girard-Perregaux watches are worth half a million euros in total.

Brother-in-law arrested over murder of Swiss teacher
The victim worked in a school in Stabio, near the town of Mendrisio. Photo: Oliver Graf

The primary school teacher was found dead in Ticino earlier this week.

Inside Switzerland’s largest nuclear bunker – 40 years on
Designed to house 20,000 people, the bunker was built in and over two motorway tunnels. Photo: Unterirdisch Ueberleben

The Local takes a tour of the Sonnenberg bunker in Lucerne, opened 40 years ago at the height of the Cold War.

Ten Swiss ski resorts named most expensive in Europe
File photo: Renato Bagattini/Swiss Tourism

Skiers in Switzerland pay the highest prices for their ski passes of anywhere in Europe, according to research.

Eco group fights Bern over wind farm plans
There are currently more than 30 wind farms in Switzerland. Photo: Alpiq

Wind turbines are “gigantic and destructive” machines, says Paysage Libre Suisse.

Vegan wins battle to be accepted by Swiss army
Antoni Da Campo will now carry out his military service. Photo: Antoni Da Campo

A Swiss man who was told he would not be accepted for military service because of his strict veganism has finally succeeded in making the army change its mind.

Geneva terror suspects to receive compensation
File photo: Emran Kassim

The Swiss public prosecutor has dropped the case against them.

Sponsored Article
How to vote absentee from abroad in the US elections
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Sponsored Article
Last chance to vote absentee in the US elections
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Sponsored Article
How to vote absentee from abroad in the US elections
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
Photo: file
Some deodorants could cause breast cancer: Swiss study
Photo: Royal Savoy
In pictures: Inside the latest Swiss luxury hotel
Photo: AFP
Geneva airport bomb hoaxer faces 90,000-franc bill
Photo: Schaffhausen police
Mother leaves toddler son alone in car to go clubbing
Photo: Fabrice Coffrini/AFP
Swiss populist attacked by knife-wielding pensioner
Photo: File
Bern argues over passports for 3rd generation foreigners
Photo: Broad Bean Media
Muslim pupils must shake hands – ‘no ifs and buts’
jobs available