Currencies

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Banks

RBS falls 2% after failing BoE stress test

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Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Categorized | Banks

Swiss tax proposal jolts bank employees


Posted on May 31, 2013

For the banks caught up in Switzerland’s bitter tax dispute with the US, the Swiss government’s plan to create a legal basis for settlements with US authorities offers the welcome prospect of closure.

For bank employees, the plan is rather less appealing – because the business records that Swiss banks can now disclose include the names of staff who were involved in dealing with US clients.

    Even among staff who did not follow the example of Bradley Birkenfeld – a former Geneva-based UBS private banker, who famously hid diamonds in tubes of toothpaste to help clients move assets without detection – this is an unwelcome prospect.

    “Of course bankers are worried,” said Denise Chervet, director of the Swiss Association of Bank Employees. “They don’t know what is going to happen, and it is never a nice feeling when you don’t know what someone is going to do with your data.”

    Some of the 13 banks that the US has been investigating for at least two years, such as Credit Suisse and Julius Baer, received permission from the Swiss government to transmit business records last year, and have already begun doing so.

    As a result, the banks and staff most affected by the new proposal – which still has to be approved by Switzerland’s parliament – are likely to be those that have not yet entered negotiations with the US authorities. Third parties, such as lawyers, who had dealings with US customers, may also be affected.

    The Swiss government’s proposed bill contains several provisions on the actions banks must take to protect bankers whose names end up in the hands of US authorities.

    These range from informing bankers in advance if their details will be transferred and assuming legal costs incurred by named employees, to pledging not to ask prospective employees about whether they have been caught up in the transmission of data to the US.

    In addition, a SFr2.5m hardship fund will be set up to cover employees who find themselves in a “personally, financially or economically difficult situation” as a result of banks’ co-operation with US authorities.

    However, banks are less well-placed to prevent the thing that their employees fear most – namely, that the US will pursue charges against some of the staff whose details come into their possession.

    The US is in possession of the names of more than 1,000 bank employees as a result of information provided by banking clients, according to Ms Chervet.

    “A lot more names will be provided, but it is hard to say how many of those people will be charged with anything. If the banks settle with the US, it will have less incentive to go after individual bankers,” she said.