Swiss Banks - A Safe Haven for Money from Around the World
Switzerland is not only well-known for chocolate and its watch-making industry. It is also famous for its unique banking and financial system. Banks play an important role in Switzerland’s economy. Swiss banks have been considered to be the most secretive in the world for many centuries. About a third of all money held outside a person’s home country - hundreds of billions of dollars - is deposited in Swiss banks.
Banking in Switzerland goes back to the 18th century. In the past , not only rich people but also authoritarian regimes and dictators have secured their money in Swiss banks. Foreigners who live in unstable and troubled areas also tend to keep money in secure Swiss banks instead of their own. During World War II German Nazis deposited much of the country’s wealth, especially money and gold taken away from Jews , in Switzerland.
Switzerland has two large banks - UBS and Credit Suisse. Private banking also has a century-long tradition in the alpine country. Currently, about 130000 people work in the banking sector. Major banks have overseas branches that employ thousands.
Switzerland’s popularity as a safe bank haven has many reasons. For one, the country has a very stable and prosperous economy, and one of the highest per capita incomes in the world. It has been neutral for many centuries, especially during the two world wars. In addition, the Swiss franc is one of the most stable currencies in the world.
Swiss banks have to follow very strict privacy rules. In 1934, a law was passed that forbade Swiss banks to reveal the name of account holders. Banks protect the privacy of their clients in a way no other country in the world does. If a Swiss banker reveals anything about a person’s bank account without permission he commits a criminal act. Such regulations have made Switzerland a popular destination for foreigners who do not want to pay taxes in their own country.
Lately, however, the Swiss government has been under constant pressure by other countries to change their bank laws, making it possible to reveal the names of possible drug dealers or international criminals. EU officials claim that more and more citizens are moving their money to Switzerland to escape taxation in their home country. Income that is not reported to the government is often deposited in Swiss banks.
In the past decade Swiss bank officials have been working together with international financial experts to combat money laundering. Under new laws they must report any financial transactions that look suspicious.
Related Topics
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- Money
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Words
- account holder = person who has money in a bank
- act = action
- alpine = in the Alps
- authoritarian regime = government that is very strict to its people and does not allow them basic rights or freedom
- billion = a hundred million
- branch = part of a company that does work in another country
- century = a hundred years
- claim = to say that something is true
- combat = fight
- commit = do something wrong or illegal
- considered to be = people think that …
- currency = the money a country uses
- currently = at the moment
- deposit = put, place, leave
- destination = target
- economy = the system by which a country’s money and goods are produced and used
- employ = give work to
- escape = get away from
- especially = above all
- forbid – forbade = not allow
- foreigner = person who lives in another country
- haven = place where you can put something in order to protect it from danger
- however = but
- in addition = also
- Jew = someone , whose religion is Judaism
- law = rules that a country passes
- major = very important
- money laundering = when money that is received illegally is put into businesses and banks in other countries , so that it is difficult for people to find out where it came from
- neutral = not taking part in wars or helping other countries
- official = person in a high position in the government or other organisations
- overseas = countries across the ocean
- per capita income = the money every Swiss person earns in a year
- permission = being allowed to do something
- popular = well-known and liked
- popularity = something that makes a place very attractive
- privacy = about private things
- prosperous = wealthy, booming
- protect = guard
- regulations = rules
- reveal = make known
- secretive= private, guarded, well-defended
- secure = to make something safe
- strict =exact
- suspicious = something that might be against the law
- taxes = the money you must pay to the government for the income you get
- transaction = here: when money is transferred from one account to another
- troubled = with many problems
- unique = only one of its kind; very special
- unstable = here: areas where the political situation can change very often
- wealth = riches, money