|
IRS & US UBS UBS, the world’s largest private bank, catering to high net worth individuals and institutions has been asked by the IRS to turn over the names of American account holders. It is estimated that UBS has approximately $20 billion of assets under management in secret accounts for U.S. citizens. U.S. laws require all U.S. citizens to report all financial accounts in foreign countries if the total value of the accounts exceeds $10,000. However, the Swiss Banking Act of 1934 allows Swiss banks to keep client information hidden from third parties including tax authorities of foreign governments. In Switzerland, in case of mere tax evasion, just avoiding taxes on their part of personal income/assets cannot be considered as crime, and banks are not obligated to release the customer identity to tax authorities or any third parties as the Swiss consider this as their own internal matter. Bank Secrecy is waived
Source: www.swissprivacy.com If the American authorities were asking UBS to turn over information about a specific account holder who is under criminal investigation, then perhaps UBS would cooperate. However, in this instance the Department of Justice and IRS are asking UBS to turn over information on all Americans. The so called “John Doe” summons, approved by a U.S. federal Judge, requests that the Swiss banking giant turns over the names of all American account holders irrespective of probable cause. That is tantamount not to a criminal investigation but a fishing expedition. It is hard to believe that UBS will comply with such a summons, for to do so would mean the end of Switzerland as a successful center of international finance. UBS 10 year Chart The long-term chart above reflects the $37 billion that UBS has written down since the sub-prime crisis began in 2007. It is hard to say whether UBS has bottomed down here because like other financial institutions UBS may have to sell more equity, diluting shares further. UBS stock price may slip further, but the Union Bank of Switzerland will not fail, as the Swiss government will not allow that to happen. Accumulating shares in UBS in the mid-teens makes perfect sense for very long-term patient investors. UBS is the leading global wealth manager with a vast international presence. When the turn around in financials occurs, UBS is likely to lead the way.
Contact
Information
|
