LIKE their country’s watchmakers, Swiss banks have enjoyed a reputation for quality, reliability and watertight discretion. But since 2008, spectacular coups by neighbouring countries’ tax authorities and investigations by America’s Department of Justice have torn at their reputation. Now they are trying to rebuild one as squeaky-clean money managers.The deceptive calm of shoppers on the Bahnhofstrasse in Zurich belies the turmoil behind the doors of nearby financial institutions. Foreign banks are selling out. The biggest Swiss names are dogged by litigation and calls for more capital just as costs are rising and margins falling. On March 13th they lost a prominent client: Uli Hoeness, president of Bayern Munich football club, was jailed for three-and-a-half years by a Munich court for avoiding tax on money in a Swiss bank account.It is now clear to even the most obstinate Swiss banker that he must change his game or face ruin. Four of the classic Swiss private banks, Pictet, Lombard Odier, Mirabaud and La Roche, have opted for limited liability, ending the owners’ total responsibility for the core bank—mainly because of the risk these days of...
from The Economist: Finance and economics http://ift.tt/1hekqi2
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