DOW JONES

BERN - Switzerland's private banks dropped their famous discretion and reserve Thursday to warn that any sweeping relaxation of the country's bank secrecy laws would be catastrophic.

The bankers urged the Swiss government to stand firm against European Union pressure to lift secrecy.

Jacques Rossier, an associate with Darier Hentsch & Cie, told journalists that "it would be totally unreasonable for Switzerland to drop its bank secrecy as a goodwill gesture in the forthcoming negotiations with the E.U., whilst other financial centers - especially the U.S. and Britain - continue their own self-serving tax policies."

At a separate press conference, Economics Minister Pascal Couchepin insisted that the government would defend the banks.

"Banking secrecy is not negotiable," Mr. Couchepin said.

The Swiss have done much in recent years to change their image as a haven for ill-gotten gains, and they insist that their secrecy laws, which date back to 1934, are no longer used to shield the money of criminals.

Despite this, scandals continue to make headlines.

For instance, more than $600 million in deposits linked to the Nigerian dictator Gen. Sani Abacha was frozen following his death in 1998 - after tighter Swiss laws against money laundering came into force. The most recent case concerns $70 million linked to former Peruvian spy chief Vladimiro Montesinos.

Tax evasion is still not a crime in Switzerland. This means that foreign depositors suspected of tax evasion in their own country can be protected by bank secrecy there.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.