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ANALYSIS: How the latest banking scandal has damaged Switzerland’s reputation

As the Swiss banking sector is rocked by yet another scandal, with the publication of damaging allegations against Credit Suisse by international media, reactions in Switzerland have ranged from outrage to defensiveness.

A Credit Suisse branch targeted in a paint attack in 2020. The organisation has come under increasing fire in recent weeks. Photo: Fabrice COFFRINI / AFP
A Credit Suisse branch targeted in a paint attack in 2020. The organisation has come under increasing fire in recent weeks. Photo: Fabrice COFFRINI / AFP

In one camp are those who are appalled at the bank’s alleged bad practices.

They focus on the fact that Swiss media were not free to participate in the investigation because of restrictive banking secrecy laws.

They’re also calling for higher penalties for Swiss banks involved in wrongdoing.

‘Swiss Secrets’: The Credit Suisse scandal explained

In the other camp are the ‘play-it-down’ team who believe that Switzerland is often unfairly singled out.

They argue that the problem of illicit assets is a global one, and other financial centres have a worse record than the Swiss.

There are even some murmurs about deliberate targeting.

With all these arguments going on, there isn’t much concentration on the actual substance of what was revealed.

And that’s partly because the revelations don’t sound that new to Swiss observers.

The global investigation involving 48 media outlets, led by Germany’s largest daily newspaper the Süddeutsche Zeitung and the Organized Crime and Corruption Reporting Project (OCCRP), is based on a data leak of more than 18,000 accounts, “the largest leak ever from a major Swiss bank”.

The data relates to clients from the 1940s to relatively recently.

The journalists found dozens of accounts that belonged to corrupt politicians, criminals, spies, dictators, “and other dubious characters”.

These were not obscure names but people whose tainted background could easily be established by a Google search, according to the consortium.

The accounts identified as potentially problematic held over $8 billion (CHF 7.33 billion) in assets. Credit Suisse, Switzerland’s second largest bank after UBS, has 1.5 trillion Swiss francs under management.

One thing everyone agrees on – the timing of these revelation is terrible for Credit Suisse.

In the past year it has been caught in a whirlwind of bad news – costly scandals involving bribery in Mozambique, a Bulgarian drug ring and two collapsed funds Archegos Capital Management and Greensill Capital. But Credit Suisse has come out fighting in response to the current exposé, dubbed Suisse Secrets.

The bank said it received “numerous inquiries” from the consortium over the past three weeks, and reviewed a large volume of accounts “potentially associated with the matters raised”.

OPINION: Why Switzerland is failing in its fight against money laundering

In a statement, the bank claimed that 90 per cent of the reviewed accounts are today closed or were already in the process of closure.

“Of the remaining active accounts, we are comfortable that appropriate due diligence, reviews and other control related steps were taken in line with our current framework.”

This defence that the bad practices took place mainly in the past and are not reflective of current standards has been echoed by several industry commentators.

They also make the point that Credit Suisse, or Swiss banks, are by far not the only offenders historically.

In an interview with Swiss Public Radio, finance journalist Myret Zaki said the revelations should be seen in the context of a wider economic war.

“We should know that money laundering is a gigantic operation involving sums of money that are infinitely greater than what Switzerland can handle and which are not well monitored elsewhere.”

Claude Baumann, publisher of, wrote in an editorial: “The impression these new accusations give is that they are a concerted attempt to not only discredit Credit Suisse, but all of Swiss finance.”

Other Swiss media, notably 24 Heures and the Tages-Anzeiger newspapers, have taken a different tack, expressing frustration at the “absurdity” that they are prevented by Swiss law from doing their jobs.

“Switzerland sees itself as a model democracy, which it is not when dodgy money that transits the country can no longer be questioned,” Ariane Dayer wrote in 24 Heures.

At a political level, there may be some repercussions in parliament in the coming months regarding reporting restrictions, if the Social Democrats and Greens get their way.

ANALYSIS: Is Switzerland actually a tax haven?

The Social Democrat Prisca Birrer-Heimo was ahead of the curve, submitting a motion last December calling on the government to give the Swiss financial regulator Finma the power to impose fines. Her motion was co-signed by politicians from Green Liberals and the Centre.

Overall, the reputational damage is probably worse abroad than at home. The Swiss public is somewhat inured to big splash revelations of wrongdoing in its banking sector – especially historical wrongdoing.

But, after Swiss financial institutions have already appeared in such a bad light in the dramatic Panama, Paradise and Pandora investigations, Suisse Secrets keeps that negative image going strong globally.

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No need to boost Switzerland’s press freedoms: parliamentary committee

A Swiss parliamentary committee on Friday rejected calls to overhaul banking secrecy rules that critics warn stifle free speech in the country.

No need to boost Switzerland's press freedoms: parliamentary committee

Switzerland’s commitment to press freedom has been questioned since it was revealed that no Swiss media had dared participate in an international media investigation into the dealings of Credit Suisse.

The vast “Suisse Secrets” investigation by dozens of media organisations from around the world claimed in February that leaked data revealed how Switzerland’s second largest bank held more than $8 billion in accounts of criminals, dictators and rights abusers.

Credit Suisse flatly rejected the “allegations and insinuations” in the probe.

While the investigation focused on the bank’s alleged handling of dirty money, it also shone a spotlight on Article 47 of Switzerland’s Banking Act, which critics say has weakened media freedom in the country.

READ ALSO: ‘Swiss Secrets’: What would EU blacklisting mean for Switzerland?

Experts say the 2015 law, which made it a criminal offence to reveal leaked banking data punishable with up to five years in prison, effectively silences insiders or journalists who may want to expose wrongdoing within a Swiss bank.

Risk ‘too big’

So while 48 media companies from around the world participated in the Suisse Secrets investigation, no Swiss news media took part due to the risk of criminal prosecution.

“The judicial risk is simply too big,” the large Tamedia media group, which has taken part in previous international data leak investigations, acknowledged at the time.

The United Nations’ top expert on freedom of expression, Irene Kahn, wrote to the Swiss government in March to voice her concerns about the law.

“The Swiss banking law is an example of the criminalisation of journalism,” she said in an interview with the Tages-Anzeiger daily this week, warning that this could result in self-censorship.

Amid the criticism, the Economic Affairs and Taxation Committee of the Swiss parliament was asked to examine calls for an overhaul of the legislation.

After hearing arguments from the banking sector and from experts on financial crime and media rights, the committee members rejected the call to change the law, a parliamentary statement said Friday.

“The majority of the commission did not find it necessary to intervene at a legislative level,” it said.

The committee, which is tasked with discussing and providing recommendations on issues before they are debated in the full parliamentary chamber, highlighted the progress made by Swiss banks in recent years in addressing money laundering and other economic crimes.

Now, “they are in line with international standards,” the statement said.

It also cautioned that changing the law could result in “public accusations targeting individuals”, without providing further details. And the committee members stressed that “no journalist had ever been convicted until now by a court of violating Act 47”.