for the Q Wealth Report
In the American media and press, a familiar news story is being rehashed – again! The IRS are trying to scare people away from perfectly legal asset protection and offshore banking strategies, by cashing in on publicity surrounding their recent coup against Swiss banking guant UBS. UBS have almost closed down their offshore private banking divisions in Geneva, Zurich and Lugano following IRS pressure.
“In the hush-hush world of Swiss banking, the unthinkable is happening: secrets are spilling into the open,” comments Lynnley Browning in the New York Times. “UBS, the largest bank in Switzerland, agreed on Wednesday to divulge the names of well-heeled Americans whom the authorities suspect of using offshore accounts at the bank to evade taxes.”
Reading beyond the headlines, however, the truth becomes clearer: “It is unclear how many of its clients’ names UBS will divulge. Federal prosecutors have been examining about 19,000 accounts at the bank, but UBS ultimately may disclose the identities of only a few hundred customers.”
This, dear reader, is what I wrote about here just a few days ago in my article Is Swiss or Offshore Banking Dead? No Way!
It’s pure hype, as the article continues quoting a known hater of all things offshore: “The Swiss are saying that this is the end of Swiss banking as they knew it,” said Jack Blum, an offshore tax specialist. “Nobody will trust the security of the Swiss bank account.”
Exactly as I predicted the other day – a few hundred, or more likely a few dozen, people who can be identified by the IRS as tax fraudsters for other reasons will have their banking details turned over to the IRS, in accordance with the treaties. Nothing new there. It is not the end of Swiss banking. It is just the IRS trying to get publicity to scare people away from offshore bank accounts.
The Swiss do, however, have another very significant problem at the moment, that you should take into account when considering Swiss banking. In an interview with Swiss daily newspaper Tagesanzeiger, a well-known economist has warned that Switzerland risks bankruptcy, if the recent market turmoil centering on Eastern Europe is not contained quickly. At issue are loans made in Swiss francs to Eastern European debtors – in other words, sub-prime mortgages in places like Hungary, where the property market has collapsed. The rapid growth in many countries of Eastern Europe was stimulated through loans in Swiss francs. Swiss banks and offshore institutions loaned the local banks francs, which passed the francs on to their borrowers. The loans were attractive because borrowers paid interest rates much lower than required for loans in local currency.
With many countries in the region falling into depression, currencies and asset prices are plunging. Therefore, debtors domiciled in Eastern Europe are increasingly expected to have difficulty with mounting foreign debt loads — and that spells trouble for Switzerland…. There’s a translation of the original article here.
If you are interested in learning more about protecting your assets through Swiss private offshore banking, and more attractive lower profile wealth management alternatives in Europe and elsewhere, Q Wealth Report brings you the answers. The Practical Offshore Banking Guide 2009 is a well-written and researched independent guide telling you in about 40 pages how to open your offshore bank account and – more importantly – how to keep it in good standing, and maintain a good relationship with your offshore banker.