Switzerland — long famous for storing money and not asking any questions — has been beefing up scrutiny on banks enjoying shelter in the Alpine paradise's lax regulatory structure, Businessweek reports.
And foreign private banks in Switzerland are now heading for the exits.
The number of foreign-owned Swiss banks fell to 129 by the end of May from 145 at the start of 2012, according to data from the Association of Foreign Banks in Switzerland. Assets under management slid by a quarter to 870.7 billion Swiss francs ($921 billion) in the five years through 2012 as clients withdrew money or paid taxes on undeclared accounts, the data show.
Switzerland houses 26% of global offshore wealth, or about $2.2 trillion, according to Businessweek. U.S. and EU pressure sparked the new crackdown.
The U.S. has been investigating Swiss banks and units of foreign banks in the country, including that of London-based HSBC, after UBS AG (UBSN) in 2009 avoided prosecution by admitting it fostered tax evasion and delivering data on about 4,700 accounts of Americans. France and Germany have been searching for tax dodgers using data stolen from Swiss banks and also sharing some of the information with authorities in other European countries.
British mortgage giant Lloyds Banking sold its international banking business to a Swiss company in May. And sources told Businessweek that more banks are reviewing their presence in Switzerland and weighing if and how to leave.
More From Business Insider