Swiss Havens? No Longer Heaven on Earth
A few weeks ago, the news came that many US citizens had allegedly been helped by Swiss banks in transferring funds abroad to elude the IRS. Such was the conclusion of an investigation by a US Senate Committee, prior to hearing the CEOs of the banks involved in the case. The activity allegedly involved the active search for customers on US territory, the opening of banking subsidiaries in the States, and the material collaboration with offshore intermediaries to facilitate the illegal transfer of funds. The activities of the Swiss banks, in the case under discussion, could have also involved the unlawful collection of savings.
If the charges are proved, the regulatory authorities will have to intervene. But beyond the sanctions and remedies applied by the US administration, the event lends itself to less contingent considerations. Firstly, the uncertainty still affecting the international regulation of financial markets: even under the current framework, more open to international cooperation, there are closed systems that put barriers on the cross-border activities of financial intermediaries. In the absence of norms recognized by the countries of interest explicitly aimed at cross-border activities, loopholes are found for the purposes of tax evasion and money laundering, bringing damage to the collective interest. If individual systems understandably tend to protect themselves from other countries' competition, this creates grey areas where illicit behavior more easily takes place. The signing of agreements of international cooperation (e.g. between the US and Switzerland) requires the renunciation of exclusive national prerogatives, and although such agreements are hard to reach, they can benefit the regulation and efficiency of financial markets in medium-long term.
On a different plane, the event puts on the table once again the issue of Switzerland's role in the context of international finance. The necessity for more balanced relations with the US and the EU is becoming more pressing, both for the security of those investing in Switzerland, because they consider it an advanced and transparent marketplace, and for the country to avoid the risk of international isolation. The agreements reached with some EU member states, as well as that under discussion with Italy (the so-called voluntary disclosure), seem to go in the right direction. The skill and professionalism of Swiss financial operators would certainly be better valorized, if Swiss banks operated according to standards prevailing in other advanced economies. This would mean for Switzerland to put the grey areas of tax havens and low transparency in the past for good.