Executive Summary The Swiss banks are losing clients wholesale. The Americans were responsible for about 5% of the Swiss bank offshore-derived holdings, which totaled 1.8 trillion dollars ($1,800,000,000,000). The Swiss are quite troubled by the exodus of German, Italian and French money also due to new tax treaties.
These countries are offering amnesty programs that involve repatriating the funds back into the home country and paying back interest and penalties. The Americans want to basically take all their citizens money all their money in the Swiss banks and send them to jail for many years. According to KPMG 80% of Europeans money in Swiss banks is undeclared. They also estimate that 25% of Switzerland's private banking sector is composed of undeclared funds. KPMG says that 51% of legacy assets in Switzerland is European money much of which is being repatriated. The undeclared money account holders would take little or no interest on their accounts. They would also rarely ever communicate with the bank. Thus they were very profitable clients for the Swiss. These were the most profitable accounts the Swiss had.
The smaller Swiss banks will be hit the hardest and they lack the resources to regroup and reinvent themselves. Where will the next Switzerland be is a good question. There is always going to be a new Switzerland in that it is too lucrative an industry.
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