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* For other news from Reuters Global Wealth ManagementSummit, click on http://www.reuters.com/summit/Wealth13
* Says U.S. pressure is not "respectful diplomacy"
* Credit Suisse wants deal as soon as possible
* Swiss should wait for level playing field - Couttsexecutive (Adds quotes)
By Katharina Bart
GENEVA, June 3 (Reuters) - Switzerland has no choice but tobow to a U.S. ultimatum and sidestep its banking secrecy laws toend an investigation into how Swiss banks helped wealthyAmericans to evade taxes, former Deutsche Bank headJosef Ackermann said.
The Swiss parliament is divided over a bill that would letSwiss banks hand over internal information to the U.S.authorities in the hope of avoiding threatened criminal charges- though they still face fines set to total billions of dollars.
Ackermann, chairman of Zurich Insurance, said thatSwitzerland should accept the offer, though he described it asan "unconditional diktat" that was not an example of "respectfuldiplomacy" towards a long-standing partner.
"A sober assessment must conclude ... that there is indeedno alternative to accepting the U.S. offer," he said at an eventsponsored by Thomson Reuters in Geneva on Monday to mark thestart of the Reuters Global Wealth Management Summit.
"It probably provides the last opportunity for solving ahighly contested issue in a manner that conforms with Swiss law... and our understanding of bank client privacy."
Ackermann said he expected most members of parliament - manyof whom were initially opposed to the government's plans - wouldeventually understand the urgency of supporting the legislation,which faced its first formal committee hearing on Monday.
Though he acknowledged that the fines would not be pleasantand could force state-owned banks to seek support, he said thatthey would not destroy the Swiss financial system.
The Swiss government is asking parliament to rush throughthe legislation in June, citing a U.S. threat of furthercriminal charges against more banks.
Since returning from Germany last year, Ackermann has becomea forceful advocate for the Swiss financial sector and is a raresenior banker still in a position of power given the departureof other top figures since the financial crisis.
Switzerland's tradition of banking secrecy has helped tomake it the world's biggest offshore financial centre, with $2trillion in assets. But its position has come under fire sincethe crisis, as cash-strapped governments clamp down on taxevasion, with authorities in Germany and France alsoinvestigating Swiss banks.
Ackermann, who worked at Credit Suisse earlier in hiscareer, said that Swiss bankers had long operated on theprinciple that it was legitimate to help foreigners seeking toprotect their wealth from high taxes.
"We have to understand that this is no longer acceptable,"he said. "We will have more and more pressure from other partsof the world."
U.S. THREAT
UBS, Switzerland's biggest bank, was forced in2009 to pay a fine of $780 million and deliver the names of morethan 4,000 clients to avoid indictment, helping the U.S.authorities to pursue other Swiss banks.
Juerg Zeltner, head of the UBS private bank, said he hopedparliament would approve the U.S. legislation for the sake ofthe industry, even though UBS has settled its tax dispute.
"We need a solution," he told the Reuters summit. "This isvery important for Switzerland and the financial centre."
Banks under formal U.S. investigation include Credit Suisse, Julius Baer, British bank HSBC's Swiss arm, privately held Pictet in Geneva and smaller playerssuch as LLB's Swiss arm and local government-backedZuercher Kantonalbank and Basler Kantonalbank.
Rolf Boegli, head of premium clients at Credit Suisse, saidhis bank hoped for a deal as soon as possible: "If one thing isbad for the wealth management business, it is uncertainty."
Luxembourg and Austria both recently agreed to shareinformation on account holders with their European Unionpartners, raising the heat on Switzerland to do likewise, butbankers said the country should bide its time.
"There is no reason ... for premature and possiblyill-considered concessions with only regional reach," Ackermannsaid.
He urged Switzerland to step up debate with the Organisationfor Economic Cooperation and Development (OECD) to push for aninternationally binding standard on exchange of client data.
"For a global standard to be palatable also for Switzerland,it must reconcile the justified desire to deal with tax evasionwith our long-standing policy of protecting financial privacy,"he said
Alexander Classen, head of the international operations ofCoutts, the private banking arm of Royal Bank of Scotland Group, agreed. "This kind of agreement would have to beapplied to every jurisdiction and not Switzerland alone," hetold the summit. "I see no reason why Switzerland should budgeuntil there is a level playing field in place."
(Additional reporting by Edward Taylor and Emma Thomasson;Editing by David Holmes and David Goodman)
