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Americans are the new outcasts of banking.
LONDON - Move over, Iran and North Korea: Americans are the new outcasts of banking.
Swiss and other European banks have begun distancing themselves from American clients in the wake of UBS' spat with U.S. tax authorities, either by closing existing accounts or rejecting new applications.
Banks, particularly smaller Swiss ones, are "actively closing" accounts of Americans resident in Switzerland, as well as those of U.S.-domiciled Americans, said David Treitel, tax director of London-based U.S. Tax & Financial Services. Similar cases have begun to spring up in Britain, too. "Clients are being told, 'We'll be closing your accounts; you have X-number of days left,'" he said, adding that Americans were becoming "increasingly unpopular" among large foreign banks.
European banks have always treated American clients with caution, but their attitude has changed dramatically ever since the Department of Justice began demanding that UBS hand over the details of some 52,000 clients suspected of evading U.S. taxes. The dispute has left UBS between a rock and a hard place: it will break Swiss secrecy laws if it hands over the information, but face punitive action from the U.S. government if it doesn't.
According to Don Curtis, chief executive of Geneva-based Curtis & Co., Swiss banks are closing accounts of American clients across the board, ranging from pension to securities to current accounts. The placement of funds and securities have been the most affected, according to Stuart Hearn of Carouge, Switzerland-based Compta Center.
A spokesman for UBS said that nothing had changed since last year, when the bank announced it would be exiting its offshore services for U.S.-domiciled clients. Swiss-domiciled American clients would, however, continue to be able to open regular current or business accounts.
"Banks are very worried about the administration costs and financial regulation," said Treitel. "They see taking the business as too costly or as too invasive of privacy."
"The philosophers have only interpreted the world, in various ways. The point, however, is to change it." Karl Marx

"He would, wouldn't he?" Mandy Rice-Davies. When asked in court whether she knew that Lord Astor had denied having sex with her.

“I think it would be a good idea” Ghandi, when asked about Western Civilisation.

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Americans are the new outcasts of banking. - by Magda Hassan - 01-08-2009, 05:28 AM

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