20/06/2013

Banking Secrecy and the Reconciliation of Swiss Values

The recent pressure on Switzerland to cooperate with the United States and eventually other countries to transmit banking information has sent shock waves from Zurich to Geneva and afar. The lower house of Parliament has voted not to consider the Federal Council’s proposal to cooperate with the American authorities. The general opinion throughout Switzerland has been of unfair intervention in internal affairs by the U.S., if not a downright violation of sovereignty. In addition, the vocabulary used bemoans capitulation before the forcing exercised by the superpower. In sum, a grave injustice is being done by the United States to Switzerland.


 

A brief comment by Patrick Odier in a televised interview opens another perspective. While announcing a more conciliatory attitude by the banking community to an eventual settlement about sharing information, Odier admitted that there had been errors by Swiss banks in violation of American law. In other words, and reading between the lines, Odier suggested that the end of Swiss banking secrecy was not the result of unfair intervention or a naked use of power. Rather, I surmise, Odier was saying that the settlement was the price the bankers had to pay for their illegal activities. Courageously, Odier recognized that the blame was not in Washington, but in Geneva and Zurich.

If one follows Odier’s reasoning, which I am sure very few will, one might question how the Swiss reconcile banking secrecy with their reputation for democracy, transparency, human rights and humanitarianism. How does one reconcile many of the secret accounts with official calls for the rule of law and transparency throughout the world? While banks have been more vigilant in their due diligence concerning clients, there is no question that illegal accounts have fallen between the cracks. How can the Swiss government continue to fight against corruption when many of its leading private institutions have been in flagrant violation of the laws in other countries?

Very few people have sighed relief at the current situation. There is a panic about the loss of jobs and tax income with potential bank failures. But few are celebrating the potential reconciliation of Swiss values with the banking industry which seems to have operated in its own world by its own standards. How to explain that very few of the leaders of the major banks have been indicted or put in jail for their activities? Huge fines have been paid, much to the detriment of the shareholders. But the irreconcilable image of Switzerland as the place James Bond hid money and the global center for human rights and humanitarianism and the promotion of the rule of law has not changed.

I sense that behind Patrick Odier’s very brief sentence was a sigh of relief that those irreconcilable differences will finally end. And I do hope that he is not the only banker with that feeling, a feeling that should be shared by a larger part of the population as well.

 

Daniel Warner

June 20, 2013

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