Steve Chiotakis: The Swiss government today agreed to hand over the names of more than 4,000 Americans suspected of tax evasion. The vote confirms a deal Swiss bank UBS made with the U.S. government to avoid charges that the bank helped Americans dodge more than $20 billion in taxes. Marketplace’s Europe correspondent Stephen Beard is with us live from London with the latest. Hi Stephen.
Stephen Beard: Hello, Steve.
Chiotakis: What happens now with all of these Americans accused of tax evasion?
Beard: The UBS will now hand over the names of as many as 4,450 of them to the IRS, and unless these people have already been in touch with the U.S. tax man, I imagine they can expect a knock on the door pretty soon.
Chiotakis: Well is this the end of Switzerland’s famous bank secrecy?
Beard: Probably the beginning of the end, yes. Certainly if the U.S. government decides to go for the other 20 or so private banks in Switzerland that offer these services. And Switzerland of course has been coming under a lot of pressure from other countries, from neighboring countries like Italy and Germany, over the same issue. So yes, it does look as if it’s the beginning of the end.
Chiotakis: And what’s the economic fallout of the news, Stephen?
Beard: Well it’s quite a blow, but banking, although a big industry in Switzerland, is not the absolutely dominant part of the economy it once was. This is probably more of a psychological blow than anything else. Andrew Hilton of the CSFI think tank is an economist who knows Switzerland well, and he says this development undermines a basic principle of Swiss national life:
Andrew Hilton: The absolute assurance that your financial details will not be revealed to anybody — not to your neighbor, not to your wife, as it happens — is far more fundamental to the Swiss national psyche than it is to any other.
And that explains how, in the first place, Switzerland became the world’s premiere hiding place for money.
Chiotakis: OK. Marketplace’s Stephen Beard reporting from London. Stephen, thanks.
Beard: OK, Steve.