February 19, 2009

UBS's landmark settlement deal with U.S. tax authorities could be the final nail in the coffin for Switzerland's prized bank secrecy and will have far-reaching consequences for the whole offshore financial industry.Under pressure from Washington, Berne agreed to let UBS pass on data of certain U.S.

clients without waiting for an ongoing appeal process against the data transfer by some of these clients, an unprecedented step in Switzerland.Switzerland's leading newspaper, Neue Zuercher Zeitung, called the $780 million settlement, which UBS agreed with Berne's blessing, a "capitulation.""For Switzerland, it is a true catastrophe for the country's first industry, that is to say the banking sector," Geneva lawyer Charles Poncet, a former member of the Swiss parliament, told Radio Suisse Romande.