The United States has ended talks with Switzerland aimed at settling a row over investigations into Swiss banks accused of helping Americans dodge taxes, a newspaper reported on Sunday.
Citing an unnamed source with insider knowledge, the SonntagsZeitung newspaper said the U.S. had sent Berne a letter two weeks ago saying it had no interest in a global settlement to end the tax dispute.
Fresh after the news that Credit Suisse is being investigated in depth by the US it looks like this deal has stumbled for ione excellent reason: that principle has come ahead of cash. The US wants to prosecute those who abused US law. The Swiss wanted to pay and get all Swiss bankers off the hook in the US.
The US have done the right thing.
Now it's time for the UK and Germany to do the same thing (and that certainly seems possible: their talks ar also running into problems). Then it's fair game to go back at Swiss banks for the assistance they have given to their clients to evade tax.
I'm looking forward to seeing the outcome of that. My hope is that the issue is taken to the top of the banks in question, because that's where the problem lies.
There are n rotte apples in Swiss banks. It's the orchard that's got canker.
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“Fresh after the news that Credit Suisse is being investigated in depth by the US it looks like this deal has stumbled for ione excellent reason: that principle has come ahead of cash. The US wants to prosecute those who abused US law. The Swiss wanted to pay and get all Swiss bankers off the hook in the US.
The US have done the right thing.”
I’m not so certain.
US indictments of four or five Swiss sovereign individuals are mostly symbolic sabre-rattling to attain leverage. The bankers involved are not likely to voluntarily “visit” the US, and extradition will likely be hard to impossible. And even if they did the US would not achieve much by prosecuting them — the fines won’t amount to much, and the main effect would be to deter other Swiss banks from doing the same thing.
According to the article the Swiss would have turned over thousands of US client names in exchange for dropping the charges against the four or five Swiss bankers. These client names would yield much more in recovered tax revenue than the fines possible for a handful of Swiss individuals. And the deterrent effect would be the same, if not greater. In that sense the leverage gained by indicting a small number of Swiss bankers could be considered to have worked.
So, either there’s more going on here than meets the eye, or the US has self-destructively missed an opportunity to trade something relative small for something much more useful. Perhaps it thinks it can both have its cake and eat it. But ultimately it must, at some level, rely on cooperation rather than confrontation.
Jon, are you smoking weed?
The US can easily threaten to stop CS from doing business in the US unless they fork over everything for which they have proof was illegal.Plus I tell you, CS gonna have to pay Billions fine.. instead of the measly few Francs offered by the gnomes of Zurich.