Policy and Fiscal Effects of Swiss Bank Secrecy

Bank secrecy has provided a significant competitive advantage to Switzerland in its development as an international financial centre. The ‘Rolls Royce’ image of Swiss bank secrecy is not merely determined by its legal components, but also by its underlying philosophy, and the perceived discretion, honesty and efficiency of the Swiss banking system. Although bank secrecy in Switzerland has been diluted by the enactment of new financial crimes, it continues to be unassailable in the case of fiscal offences. Switzerland has sought to protect its reputation by prohibiting bankers from actively assisting in flight capital and tax evasion, but this has had little effect on Switzerland’s position as the world’s leader in the management of offshore private wealth.