Swiss Banks
Date: 24 February 2022 Tags: MiscellaneousIssue
Whistleblower information related to more than $100 billion held illegally in 30,000 accounts of Zurich-headquartered Credit Suisse has leaked.
Background
Credit Suisse is one of the world’s most iconic banks and there were issues related to using the bank to park dirty money.
Details
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The report says that dirty money of human rights abusers, fraudsters, and businesspersons who are under international sanctions are illegally stored here.
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Swiss banks are already infamous for century-old culture of secrecy, which have allowed them to become magnets for money laundering activities across the globe.
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International pressure had forced Swiss banks to forego some of its secrecy traditions and provide details of individuals hiding taxable income.
Secrecy in Swiss banks
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Geneva, the most famous banking destination, was used by French royalty to stash their wealth from historic times.
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A law made by Swiss authorities in 1713 made it compulsory for Swiss bankers to hide information about their customers.
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The silence and secrecy remained intact and was a trademark of Swiss banking. It was the main reason for its attraction.
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A law made in 1934 made it a crime to reveal details or information of customers to almost anyone — including the government. Violators can get a 5-year term.
Reasons for popularity
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The banks are located in a peaceful, politically neutral country which has high regard for its privacy laws.
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The banks are fairly stable with low risk of collapse. They run at very high levels of professionalism.
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The economy of Switzerland is stable and opening a bank account is very easy. Any adult in the world can open an account in a Swiss bank.
Importance to economy
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More than of half of assets under management in Switzerland belong to foreign clients. The industry provides one tenth to the country’s GDP.
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Apart from wealth, it creates thousands of jobs in banking and wealth management sector.
Black money of India
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Black or illegal money stored by Indian nationals in Swiss bank is a political issue and politicians have used it as an issue during elections.
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India and Switzerland have an automatic exchange of information in tax since 2018 that provides data of Indian residents storing money in Swiss banks.