The U.S. ambassador to Switzerland has complained that Swiss bank have stopped serving U.S. clients. Surely, a slap in the face for Swiss banking, which has just emerged from years of relentless pounding by U.S. authorities.
The recipients will have relished leaking it to the press: Suzan LeVine, the U.S. ambassador to Switzerland, recently sent a letter of complaint to a number of Swiss banks, according to a report by «Handelszeitung».
The top U.S. representative in Switzerland deplored the fact that Swiss banks closed the accounts of U.S. citizens and turned away new clients. LeVine wrote that she had received numerous letters from fellow Americans complaining that they didn't have access to basic banking services in Switzerland.
LeVine continued to offer her advise to the Swiss banks and finally suggested a meeting to discuss the rules and procedures in dealing with U.S. customers.
Unfortunate Timing
The letter was sent to numerous banks, for instance Migros Bank and at least to one bank that still awaits a fine in connection with the tax dispute in the U.S., according to the «Handelszeitung» report. The timing of the letter thus appears a little unfortunate and will have caused some irritation.
A string of Swiss banks this year still were occupied with closing the tax dispute with the U.S., with fines the normal outcome of the U.S. investigations. The institutes not just had to plead guilty to violating U.S. laws in conjunction with their business with U.S. clients, but also had to promise to remain on a righteous path in the future – at least in respect to the U.S.
Tough Business
And some of the so-called Tier-1-banks, who faced a criminal investigation due to a violation of U.S. tax laws, are still waiting for their final verdicts. Zuercher and Basler Kantonalbank and Pictet are three of the banks in question.
The criticism leveled at Swiss bank by LeVine isn't just tough to take because of the timing, but also because of what it implies. Some banks were ruthless in closing the dossiers of U.S. citizens, no doubt. But today's reluctance to have any dealings with U.S. clients has more to do with hard business facts.
Banking for the Rich
Banking in compliance with U.S. regulation is so expensive that business with the normal, moderately wealthy expat doesn't pay off. And given the unpredictable behavior of the U.S. authorities in tax issues, the risks and costs far outweigh the potential benefit of offering services to the 20,000 U.S. expats.
Swiss banks of course still do business with U.S. clients. About 40 companies have specifically licensed unit for that purpose. But of course: those services are restricted to the very rich, making it worthwhile. Several asset managers are also working on their onshore services in the U.S.
Swiss banking is still interested in U.S. customers. But not exactly in the way U.S. Ambassador LeVine had hoped for.
