bank run blog

The Swiss banking company UBS has announced it will cease offshore banking services for its US customers and accept no new accounts from US citizens. The declaration came last week during Senate hearings regarding the use of offshore banking companies by wealthy US citizens to shield their wealth to avoid paying taxes.

Mark Branson, chief financial officer for UBS Global Wealth Management and Business Banking, told the committee that his bank would fully cooperate with US tax officials as it attempts to identify US depositors who committed tax fraud by hiding wealth in the banks offshore accounts.

A report released by the Senate found that wealthy Americans use the services of UBS and other banks in both Switzerland and Liechtenstein to shield trillions of dollars. The investigation found that 19,000 Americans hold $18 billion dollars in UBS accounts. Senator Norm Coleman (R-MN) said American depositors use offshore accounts to hide “an estimated $1.5 trillion in American assets, resulting in lost taxes of roughly $100 billion.”

The hearing and investigation came about after an employee of the LGT bank in Liechtenstein provided 12,000 pages of documents regarding secret bank accounts to tax authorities. US authorities have initiated investigations into 100 US depositors who are alleged to have hidden wealth to avoid paying taxes. The investigation is the first time that US authorities have ever probed the use of offshore tax havens by wealthy Americans.

cross posted at

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