Swiss banks targeted in 'economic war' says UBS chief

Switzerland's financial industry could lose 20,000 jobs in the coming years due to the "economic war" being waged by the EU and US against its top banks, the head of UBS warned in an interview Sunday. "Switzerland has been attacked since 2008," Sergio Ermotti, the head of Switzerland's leading bank, told the SonntagsZeitung. This was partly because it offered more favourable tax rates than its international competitors, he added. "We are in the middle of an economic war," he said. "The idea is to weaken the two great Swiss banks, which have seen international success," he argued, referring to UBS and Credit Suisse. His comments came after French prosecutors on April 12 opened a probe into whether the bank had helped its French clients avoid taxes. UBS has said it is fully cooperating with French authorities in the inquiry. In the United States, 11 Swiss banks are being investigated on suspicion that they encouraged their clients to channel undeclared assets into Swiss accounts. The coordinated campaign to undermine Swiss finance would lead to a loss in high-value accounts, Ermotti said. "I am expecting Swiss finance to lose around 20 percent of its jobs in the coming years, being about 20,000 jobs," Ermotti told the paper. Switzerland has recently signed deals with Austria, Britain and Germany to toughen up penalties on tax cheats, but negotiations with Paris have stalled amid the ongoing French presidential elections. Swiss Finance Minister Eveline Widmer-Schlumpf met with the US Attorney General Eric Holder on Saturday on the sidelines of an International Monetary Fund meeting for informal talks on the tax evasion issue. The two sides agreed to continue to find ways to identify American taxpayers who have diverted undeclared assets into Swiss accounts, Widmer-Schlumpf said in statement.