Switzerland news: Financial roundtable of banking experts manages not to discuss tax

In December 2013 the Neue Zürcher Zeitung held its “2014 financial markets roundtable” with the chief strategists and economists of Swiss banks Pictet, UBS, Credit Suisse, and Julius Bär.

The resulting 3300 word article has the experts opining on a broad range of topics including the policies of the Federal Reserve and the European Central Bank, the risks of a new financial crisis, Germany’s new coalition government (“Germany could be the new France”), Ireland, Spain, immigration, inflation, stock markets, gold markets, commodities, and real estate.

A recent blogpost by Simon Johnson, a former IMF chief economist, introduces the idea of a “rich country trap”. In developed countries with large financial sectors  “top financial-sector executives…enjoy such high prestige that they are still called upon to run public finances. Politicians continue to defer to the supposed wisdom of these individuals”. As there is “no sector…that is willing to stand up to big banks in the political arena” the eventual result is that the financial system destabilizes the whole economy.

The NZZ article – which could have been titled “These Four Wise Men Will Now Explain Everything” – is a clear example of this excessive deference to the financial sector (includes photographs of the interviewees striking authoritative poses).

It would probably have been considered impolite of the NZZ to mention that all of these banks have been linked to tax evasion in the US, France and the Netherlands, among other countries. But since the point of the roundtable was to discuss the outlook for 2014, wouldn’t it at least have been worth asking about the future effects of FATCA, or of Switzerland currently not meeting OECD standards on tax and transparency, or of the pressure on Switzerland to sign up to EU tax transparency agreements?


Switzerland news: Bribes in Greek defense corruption scandal deposited in Swiss banks

The Tages-Anzeiger reports that millions in bribes paid by foreign defense contractors to employees of the Greek defense ministry were deposited in Swiss banks including UBS, Credit Suisse and Julius Bär.

Offshore constructions such as trusts were used to disguise the provenance of the funds.

It is not yet clear if this case will have legal consequences for the Swiss banks: the prosecutor in Switzerland is investigating if there was organizational responsibility on their part. None of the banks was available for comment, says the Tages-Anzeiger.

Reuters has background on the corruption case:  Antonis Kantas, deputy armaments chief at the Greek defense ministry between 1997 and 2002, “openly admitted to taking $16 million in bribes relating to arms deals with foreign companies from countries including Germany, France, Russia, Brazil and Sweden.”

Reuters also notes that “Heavy arms spending was one of the reasons Athens piled up debt and had to be rescued with European Union and IMF bailouts totalling 240 billion euros ($328 billion) in 2010 and 2012.”