Another conversation with my acquaintance, another detail.
I have written before about how banks routinely make a mockery of the whole idea of bank regulation, in “Why Bank Regulation is a joke“, and in “Who Bankrupted Ireland?“. Here is another peek inside the moral vacuum which is International Banking.
This source of this story swears it is true. I cannot verify if it is or if it is a modern myth. You’ll have to decide.
Remember when UBS was caught by the American tax authorities holding accounts for American citizens and not declaring the assets nor income to the American tax man? The Americans were furious. They threatened UBS and Switzerland in general with punitive measures if UBS did not provide the IRS (Inland Revenue Service) with the details. UBS balked, complained, claimed Swiss Bank secrecy and finally, in the end, gave up some accounts. All, they claimed. A few, the rest of the world believed.
After that UBS said they were going straight.
They story is that one of the very large Swiss banks, you’ll have to guess which one, was still very concerned about its long time, loyal or simply vastly wealthy American clients. What to do about them? People who had been with the banks for decades, who relied upon Swiss integrity and secrecy, who the bank now felt were being let down. A moral dilemma to vex the soul of any banker, I am sure you’ll agree. The bank in question hatched a plan.
They began to dispatch bankers to America ‘on holiday’. They would take only their beach gear, sunglasses and tourist visa, and tell immigration they were there for a ‘few days off seeing the sights’ or ‘on the beach’. They would they would then be met at the airport by a colleague who would provide them with their suit, business cards and all the contracts they needed for the business they had actually come for. From the airport they would go to the client and conduct their business, leave it all with the colleague who had met them, and then after relaxing for a day or so, would return to Switzerland.
The valued clients would have received the personal and confidential banking they expected and the US authorities were none the wiser. On paper at least the bank involved was not doing any banking in the US. Their offices were closed, their bankers all back home. Just a few of them visiting America for a bit of R&R.
As I say, the banker who told me this says it is true. This was some while ago and the story has now moved on. The bank is now, I believe, involved in a much more interesting reaction to the American attempts to crack down on Tax evasion. But I’ll deal with that in another post.
Banking as it should be and as it has been for ages. Capital is free, governments are there to protect mediocrities from their own stupidity.
Look at Hawalla and Hindu banking. Oh, that's right, you can't! Confidential……. hush hush!
I have seen that story once or twice in the FT or some such newspaper, I think there may be something in it. But why go to the trouble of visiting, can't they just do it over the telephone or internet?