Remove UBS’s banking licence

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Bloomberg reports:

A top UBS AG official was indicted by a U.S. grand jury on one charge of conspiring to help 20,000 wealthy Americans hide assets from the Internal Revenue Service to maintain a ``profitable'' business for the Swiss bank.

Raoul Weil, 48, chairman of global wealth management at UBS in Zurich, was indicted Nov. 6 in Fort Lauderdale, Florida, according to court papers unsealed today. His bank continued to help American clients evade taxes with false documents after agreeing in 2001 to identify account holders and tell the IRS about their income, the U.S. alleged.

The FT has added:

The US Department of Justice indictment also says other senior unnamed UBS's executives were involved as alleged "unindicted co-conspirators".

"These executives occupied positions at the highest levels of management within the Swiss bank, including positions on the committees that oversaw legal, compliance tax, risk and regulatory issues related to the United States cross-border business."

Three things to say. First, this action is exactly what is needed. As I said to Scandinavian tax investigators last week, getting head office bankers on criminal charges for the actions of their subsidiaries in foreign countries is the absolutely essential policy that we need to implement to put the fear of God into these people to stop them abusing the world's tax system. It is only the threat of prison the high profile people who would rather be seen as patrons of the arts (or whatever )that will prevent this sort of abuse and to achieve this we have to make parent company directors responsible for the tax abuse of their subsidiary companies, whether or not they did in practice know of the detail of those operations or not.

Second, the USA a must follow this up with the review of UBS's banking licence. If the organisation was systemically corrupt then its banking licence must be withdrawn. In that case other countries, like the UK, must consider similar action.

Third, those who argue that we should trust professional people please take note: we have ample evidence as to why we should not, and this UBS case is just part of it.