Word: lire
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Dates: during 1970-1979
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Nowhere has the boom been more thoroughly exploited than in Ticino (pop.: 265,000), which lies along the country's border with Italy. The banking industry there, centered largely in the towns of Lugano and Chiasso, is built on Italian flight capital. Billions of lire are smuggled out of Italy each year by depositors worried variously about high taxes, inflation (current annual rate: 21%), and the political gains of the Communist Party. As many as 254 Swiss banks or branches located in Ticino compete fiercely for these loose lire. Some of the banks are suspected of collaborating...
...ready to shout rhetoric any more at the cue of a red or black flag." Walsh is flying to Italy in August for a ten-month internship with the Rome Daily American. There her salary will be $80 a week, but she adds: "It sounds a lot better in lire -250,000 a month...
...affair in Chiasso, a Swiss town on the Italian border, is a result of Switzerland's historic role as a haven for foreign money. For years, wealthy Italians had been lugging suitcases crammed with lire for deposit in Swiss banks; Crédit Suisse in Chiasso was a prime recipient. In 1975 the Swiss government became alarmed by the foreign-currency inflows that were forcing up the Swiss franc to unrealistic levels, harming Swiss exports. To discourage foreign depositors, the government slapped a 10% "negative interest" charge on large accounts held by non-Swiss...
However, the investments did not flourish as the Chiasso bankers hoped they would. Then, in late 1976, the Italian government, which hoped to lure home lire, offered a blanket amnesty to all Italians who would bring back their money. Result: withdrawals were so large that Crédit Suisse's branch in Chiasso was forced to turn for help to the home office in Zurich. The head office's investigation led to police involvement. Three Chiasso bankers, including Branch Manager Ernst Kuhrmeier, have been arrested on charges of criminal mismanagement...
Still, only a small proportion of the illegal capital outflow is being transported by Mercedes and motor scooter. Until new antismuggling laws were passed last April, lire in cash or checks could be transferred to some Swiss or Liechtenstein banks via clandestine exchange channels in Rome and Milan. Huge sums have also been sent abroad by the device of under-invoicing exports and over-invoicing imports; the excess amounts were then deposited in bank accounts abroad. But when it seemed that the Communists might make major gains in last June's elections, Switzerland was awash in a flood...