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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 evade taxes, ex-Deutsche Bank AG head JosefAckermann said.
The Swiss parliament is divided over a government billunveiled last week, which would let Swiss banks hand overinternal information to the U.S. authorities in the hope ofavoiding threatened criminal charges - though the banks stillface fines likely to total billions of dollars.
While not an example of "respectful diplomacy" by the UnitedStates, which is effectively dictating the terms of thesettlement, Switzerland should accept the offer, said Ackermann,who is chairman of Zurich Insurance.
"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.
"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."
Since returning to Switzerland from Germany last year,Ackermann has become a forceful advocate for the Swiss financialsector, a rare senior banker still in a position of power giventhe departure from the industry of other top figures during andsince the financial crisis.
Switzerland's tradition of banking secrecy has helped makeit 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 as well as theUnited States probing Swiss banks.
Bridling at the U.S. pressure, many Swiss lawmakers havepledged to vote down the deal, which the Swiss government isasking parliament to rush through, citing a U.S. threat offurther criminal charges against more banks.
It insists banks will still not be allowed to hand overclient names, but the new proposal, valid for a year, wouldallow them to hand over so much information that U.S. officialsshould be able to identify individuals involved.
U.S. THREAT
Some banks not named in the investigation, along withlobbies for thousands of tax lawyers, custodians and small assetmanagers, have also expressed outrage, fearing a deal thatignores their concerns and leaves them exposed to potentialcriminal lawsuits.
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, giving the U.S.authorities information that allowed them to then pursue otherSwiss banks.
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.
Ackermann also urged Switzerland, increasingly alone inEurope in holding on to its banking secrecy law, to step updebate with the Organization for Economic Cooperation andDevelopment (OECD) about an internationally binding standard onautomatically exchanging client information.
Nearly all EU member states exchange information about whatinterest payments bank account holders receive. Luxembourg andAustria both recently came under pressure from their Europeanpartners and have agreed to sign up to the code, in turn raisingthe heat on Switzerland.
"There is no reason ... for premature and possiblyill-considered concessions with only regional reach. Now is thetime to carefully evaluate options and seek a solution within abroadly accepted framework," Ackermann said.
"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."
Prominent bankers including UBS Chairman Axel Weber andlobby head Patrick Odier have dropped their opposition toautomatically exchanging information, but the issue remainshighly politically charged in Switzerland, where secrecy andprivacy is still cherished. (Editing by David Holmes)
