A blow to Credit Suisse and the Swiss banks
Since last weekend, a consortium of investigative journalists has been exposing 18,000 accounts belonging to 30,000 people, all of them at Credit Suisse, the second largest banking corporation in the Swiss Confederation after UBS. The size of the consortium, which includes the German Süddeutsche Zeitung, the British The Guardian, the American The New York Times and the French Le Monde, gives the scandal enough credibility to deal a brutal blow to the bank and, by extension, to a large part of the Swiss financial system.
The vast amount of material leaked by an anonymous informant to the German newspaper - who has shared it and discussed its veracity with his associates - lists names and numbers of all kinds of people from no less than 90 countries. A long list of dictators, heads of secret services, traffickers in people, drugs and arms, casino kings and magnates of the most coveted raw materials make up the very long list of billionaires from all five continents, headed by those who have amassed huge fortunes in their own poor countries.
Credit Suisse angrily protests, pointing out that the journalists' own investigators admit that 90% of the accounts and their holders have been closed or are in the process of being closed. This certainly seems to be the case from what is being published, but it is also true that many countries still bear the consequences of the looting to which they were subjected for many years, and that the fruits of this looting ended up in the bank's vaults. In recent years, Credit Suisse has paid 4.2 billion dollars in fines and penalties, mainly imposed by the US authorities, when it was found to have been involved in money laundering and US tax fraud. Even today, The Tax Justice Network estimates the total annual tax losses that end up in Switzerland at $21 billion.
The story is always there to be told, and reputational damage is not repaired overnight. The bank also defends itself by pointing out that the new Swiss laws abolished the famous banking secrecy and that it observes the strict due diligence measures that are imposed when an institution from another country or a foreign citizen wants to open an account. They are considered potential high-risk clients if the money they want to deposit is related to gambling, arms trafficking, financial services and mining. However, whistleblower examiners look at one very revealing fact: the length of time between a person's notoriety as a criminal and the corresponding closure of his or her account, with a large number of cases showing that a large number of years elapse between the two.
The whistleblower who disclosed the information justified this by denouncing that "the laws protecting Swiss banking secrecy are immoral". Under the pretext of protecting financial privacy, the shameful role of Swiss banks as collaborators of tax evaders is covered up.
Switzerland's vocation for banking secrecy began in 1713, when the Grand Council of Geneva prohibited the canton's bankers from disclosing details of the fortunes deposited by European aristocrats in their establishments. The country gradually became a tax haven and a safe haven respected by all countries.
In 1934, the Bank Secrecy Act made it an offence to disclose to foreign authorities any information about their clients from any country in the world. Strict observance of the rule increased the prestige of Swiss banks and considerably multiplied their deposits, regardless of the origin of the money.
That all changed in 2007, when the "traitor banker" (as his former peers call him) Bradley Birkenfeld voluntarily provided the US authorities with information about how his bank helped thousands of wealthy Americans evade taxes. In 2014 Switzerland signed the International Convention for the Automatic Exchange of Bank Information, although it would only begin to implement it in 2018, i.e. just yesterday. As of today, according to The Guardian, the Swiss financial system handles CHF 7.9 trillion, almost half of which is held by foreign clients.
As for Credit Suisse, its former chairman, star banker António Horta-Osório, resigned earlier this year after being found guilty of violating COVID-19 restrictions. His successor, Axel Lehmann, had barely taken up his post when he admitted that the bank had lost 1.6 billion Swiss francs in the last quarter of 2021. He included CHF 400 million in provisions for potential liabilities for "legacy issues".