THE Swiss parliament finally backed a treaty yesterday to give the US government details of clients UBS helped dodge taxes, ending nearly a year of uncertainty that threatened the Swiss bank’s recovery.
The two houses of parliament agreed not to hold a referendum on the treaty after crisis talks yesterday, so Swiss tax authorities should be able to hand over on time the details of the 4,450 clients, lifting the veil on Switzerland’s cherished tradition of banking secrecy.
Berne and Washington cut the deal last August to end a damaging lawsuit against UBS, Switzerland’s biggest bank. But wealthy clients of UBS continued to leave in droves as the threat of further legal action loomed if Switzerland failed to deliver on its promises within a year.
“UBS is finally off the hook and will regain ground in its wealth management business,” said Sarasin analyst Rainer Skierka.
Yesterday’s vote will bolster UBS chief executive Oswald Gruebel’s attempts to steer the world’s second-biggest wealth manager to recovery after a government bailout in the financial crisis.
Client cash could stop flowing out of UBS by the end of 2010, turnaround specialist Gruebel assured investors last month, as the bank booked its biggest quarterly profit since he took charge.
The timetable for a referendum would have prevented the handover of client accounts on time, breaking the terms of the tax treaty and risking US retaliation that would have further shaken client confidence.
“Parliamentary approval means that nothing now stands in the way of UBS client details being disclosed,” the Swiss Justice Ministry said.
City A.M. Reporter