How can Switzerland maintain a banking system which is almost unaccountable to the rest of the world?



The term "Money in the Swiss Banks" is used as a synonym to monetary corruption (black-money, money laundering, offshore wealth, and so on).

Indian black money in Swiss banks
$200bn of Pakistan in Swiss banks
Swiss bank hid money for suspected criminals

How can Switzerland maintain a banking system which is unaccountable (almost) to the rest of the world?

Answer

It really was not all that long ago (1990's) that banks were not really connected to each other and while they had computers to help track and calculate balances, the paper trails were the way changes to accounts were tracked. Before this it was much harder for criminals and honest businessmen to transfer their funds across borders.

Through the World Wars and many other conflicts across post industrial Europe, Switzerland developed a reputation for being a stable place to store your wealth during times of crisis. It stayed neutral during the wars, and protected vulnerable assets of the elite of both sides. It became the go to place for wealthy to store their wealth because of the guaranteed protections as well as the neutrality that it strove to maintain. This was assisted by the fact that the terrain of Switzerland makes conquering the nation incredibly difficult, allowed it to operate in an independent and neutral manner.

Then the internet came. A great argument could be made that no industry was more revolutionized in the internet age, than banking. Suddenly deposit slips and account ledgers that had worked for close to a millennia for managing bank accounts were slowing business down. It used to be that a business needed to take its checks to the bank to deposit them and then wait to make sure the totals all matched. Now a computer scans the checks and does the math and makes the deposit automatically. In 1990 my father owned a business that took in about 30% cash 68% paper checks with about 2% credit card transactions. That same business today is about 5% cash 95% electronic transaction, and 0% paper checks, because they no longer accept paper checks that way, they get scanned and processed electronically.

Today Switzerland is trying and failing to maintain its status as the bankers of the worlds richest. It is far easier for the governments of the world to track the transactions, and so far more criminals are being caught trying to launder money and avoid taxes through the Swiss banks.


I suspect the main reason that they are allowed to continue they way they are is that they have shown a willingness to open up their books for inspections by friendly nations and to expose those people who are involved in illegal activity. How they will adapt to the internet age is yet to be seen
How can Switzerland maintain a banking system which is almost unaccountable to the rest of the world? How can Switzerland maintain a banking system which is almost unaccountable to the rest of the world? Reviewed by Hamza Bashir Ahmad on 05:44:00 Rating: 5