Word: switzerland
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Dates: during 1970-1979
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...expects the new code, which carries penalties ranging up to $4 million for infractions, to halt completely the flow of tainted funds into Switzerland. But Swiss National Bank President Fritz Leutwiler, who has long crusaded for such reforms, hopes that the code will deter banks from actively assisting their customers in breaking national laws. Says he: "We are no longer assuming that every banker is a gentleman and that he observes the rules." Leutwiler speculates that the new code may even force the eventual closing of a "small minority" of lesser banks that have operated on the fringes...
...scandal that prompted these reforms bloomed at 121-year-old Crédit Suisse, whose assets of $18 billion make it one of the storied Big Three of Swiss banking (the other two: Swiss Bank Corp. and Union Bank of Switzerland). Together they account for nearly half of all the banking assets in the country. A Crédit Suisse branch manager. Ernst Kuhrmeier, 57, has been accused of "disloyal management"-the Swiss equivalent of business fraud. He allegedly manipulated more than $800 million in a series of questionable and outright illegal dealings (TIME, May 23). Kuhrmeier...
...disaster was a clear consequence of go-go banking in Switzerland. Between 1965 and 1976, Swiss bank assets ballooned by about 480%, from $24 billion to $139 billion. Equally remarkable has been the expansion of the banks' foreign clientele. Today, better than a quarter of the Swiss banks' deposits are held by foreigners, v. only 7% at the end of World...
...reason for the influx of foreign cash has been Switzerland's enviable history of territorial neutrality. But in the postwar decades an equally big attraction has been the hermetic seal imposed by Swiss officials on banking activity-reinforced with maximum fines of $20,000 or jail sentences for revealing details of a customer's account. Tax-shy foreigners also know that under Swiss law, tax evasion is considered a civil rather than a criminal offense, which means that Swiss bankers are expressly forbidden to cooperate with investigators from abroad. (A new bilateral treaty with the U.S. on cooperation...
...management at Crédit Suisse chose to overlook some astonishingly clear signals that all was not well at their Chiasso branch. In January 1976, for example, Philippe de Weck, chairman of the Union Bank of Switzerland, showed Crédit Suisse a copy of a bank guarantee, improperly issued on fiduciary deposits, that had been channeled to Texon. Questioned about the violation, Kuhrmeier explained it away by saying, "It was a special favor that had to be done for a friend...