“The head of Switzerland’s banking regulatory body has issued a last-minute plea for Swiss banks to participate in a United States programme to reveal undeclared assets from American clients. But a prominent lawyer says many may not sign up.”
“In the Friday edition of the prestigious Neue Zürcher Zeitung newspaper, Patrick Raaflaub, director of the Swiss Financial Market Supervisory Authority (FINMA), said if a bank had any doubt it had run afoul of US law, it should sign up to the scheme and tell FINMA before December 9. Banks have until the end of 2013 to inform the US authorities.”
“Raaflaub admitted cooperation would be expensive for participating institutions – with fines up to 50% of the value of assets involved – and that the deal offered no 100% assurances that they would face no future lawsuits.
Any bank failing to cooperate “must expect to be involved in a conflict dragged out over years”, he warned, “and the fear of further sanctions from the US authorities.”
But there is a possibility that several banks may refuse the deal.”
The NZZ article (in German) adds that several banks interpreted the words of the director as “a threat”:
“In particular Raaflaub’s statement that regulations require all banks to have appropriate risk management did not go down well. Weaknesses in this core function are sufficient reason for the regulatory authorities to question if the governing bodies of a bank provide sufficient assurance of proper business conduct. Banking licenses are linked to this requirement.”
“FINMA defends itself against the criticisms, saying that from its point of view it only wants banks to make decisions which are based on an awareness of risks, and emphasizing that banks are absolutely free to make their decisions.”
The NZZ article concludes: “The impression remains that FINMA gives more weight to the requirements of the US than to the banks’ freedom of choice”.
(translation with some help from Google: corrections welcome).