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"A nut too hard to crack": Swiss banking secrecy and the international campaign for the automatic exchange of information in tax matters
Type
conference paper
Date Issued
2014-01-30
Author(s)
Abstract
Abstract: Swiss banking secrecy withstood international criticism for several decades. Yet after 2008 the Swiss Government made a series of major concessions that have dramatically restricted the scope of banking secrecy despite the Swiss Finance Minister's proclamation in early 2008 that Swiss banking secrecy would be "a nut too hard to crack". This article submits that two causal mechanisms led to the restriction of Swiss banking secrecy. First, the centrality of the U.S. financial market allows the USA to impose certain rules on foreign banks that make them subject to the U.S. legal system even if these regulations are at Odds with other countries' regulations. Having violated these rules, some major Swiss Banks repeatedly faced the threat of an indictment that could have led to bankruptcy, thus leaving the Swiss Government little choice but to make concessions on banking secrecy. Second, countries and organisations critical of banking secrecy took advantage of the investigations by U.S. authorities against Swiss banks to launch a new campaign for more information
exchange in tax matters. Developing new global standards that increasingly rule out any form of banking secrecy the OECD started new rounds of blacklisting of countries that do not satisfy these standards. Thereby, the OECD benefitted from the fact that the conflict with the USA had tarnished Switzerland's reputation as an offshore financial centre, which made it difficult for Switzerland to win the rhetorical contest against the supporters of increased information exchange.
exchange in tax matters. Developing new global standards that increasingly rule out any form of banking secrecy the OECD started new rounds of blacklisting of countries that do not satisfy these standards. Thereby, the OECD benefitted from the fact that the conflict with the USA had tarnished Switzerland's reputation as an offshore financial centre, which made it difficult for Switzerland to win the rhetorical contest against the supporters of increased information exchange.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Global Democratic Governance
Refereed
No
Start page
32
Event Title
Annual Conference of the Swiss Political Science Association (SVPW)
Event Location
Bern
Event Date
30.-31.01.2014
Subject(s)
Division(s)
Eprints ID
231925