Swiss private banks give up secrecy tradition amid tax crackdown

Switzerland's exclusive private banking sector is turning the page on the business model that crafted its fortune and reputation amid tougher international regulations and a crackdown on tax cheats, insiders say.

Amid international pressure on Swiss banks to make amends for past practices of allowing and even helping foreign nationals to hide assets from the taxman at home, the sector has been undergoing a seismic shift and is even bracing to give up its cherished tradition of banking secrecy.

In this climate, there was no point for the tradition-laden private banking sector to "hang on to an idealised but now re-evaluated past", said Christophe Gloor, the head of the Association of Swiss Private Banks, who also heads the La Roche & Co private bank.

Instead, he told bankers gathered for the association's general assembly in Basel that Switzerland's private banks, many of them still controlled by their founding families, should face the new reality "to better build the future".

Switzerland agreed a few weeks ago to phase out its long tradition of banking secrecy over the next two years, caving to pressure from foreign governments that have become increasingly eager to lay their hands on hidden assets since the 2008 global financial crisis.

The country reluctantly agreed to opening the way to an automatic exchange of banking data, laying waste to its long-held conviction that accounts should be taxed but all information about them should remain confidential.