Swiss banks hit by huge deposit outflow in tax crackdown

[ZURICH] SWISS banks have suffered from a massive outflow of funds since 2008, a survey said on Friday, squeezed by an international crackdown on tax evasion.

The survey by auditors PricewaterhouseCoopers attributed much of the outflow – totalling almost 350 billion Swiss francs (S$474 billion) – to customers paying fines for undeclared assets held in Swiss accounts.

The report said that foreign clients withdrew about 100 billion Swiss francs to pay fines abroad, and 250 billion Swiss francs were transferred to other countries.

Martin Schiling, PWC’s head of financial services in Switzerland, was upbeat about the country’s banking sector in spite of the sizeable cash outflows.

“Swiss private banking will have to undergo some fundamental changes in the coming years,” he said.

“But private banks will emerge from this process stronger, and the global reputation of Switzerland as a financial centre will rebuild itself.” – AFP