23 února 2009

23/2 CHF could be under pressure due to pressure on Swiss banking secrecy.

The UBS is currently being sued by the US Government to hand out names of 52,000 US citizens that according to the US Government are customers in UBS and have avoided paying tax of their interest rates. Prior to this the UBS and the US Government settled in another lawsuit where UBS agreed to pay 780 million USD in penalty and hand out 250-300 names of US clients.

UBS and the Swiss banking secrecy more generally is under severe pressure from Obama who during his campaign stated that he will make sure that accounts in tax heavens held by US citizens will be taxed. The EU leaders followed Obama’s stance during the weekend in a pre G20-meeting. The Swiss government opposes this and is very reluctant to let go of the Swiss banking secrecy. However with political pressure from EU and the US chances are very small that Switzerland will win this battle.

The balance sheets of UBS and Credit Suisse added together are 8 times the GDP of Switzerland and the earnings in the banking sector accounts for approximately 14% of Swiss GDP. This makes Switzerland and especially the CHF very vulnerable towards the current turmoil around the Swiss banking secrecy.

On this note we expect that will the CHF will be under pressure when the case against the Swiss banking secrecy evolves.

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