Shares in Swiss cantonal banks plummeted on anticipation parliament will approve a bill that would allow Swiss banks to cooperate with U.S. authorities in their bid to catch tax evaders.
Basler Kantonalbank stock declined 8.7 percent, the most since at least 1989, to 86.75 francs at 2:41 p.m. in Zurich. Fellow regional lender St. Galler Kantonalbank (SGKN) was down 3.8 percent at 359.25 francs, its lowest intraday level since Oct. 10, while Banque Cantonale Vaudoise (BCVN) declined 3 percent to 483.25 francs.
The economics committee of the Swiss parliament’s upper house meets today for an initial closed-door hearing on the plan, the details of which have not been made public. Both houses are due to debate the measure in the current session, which runs through June 21.
“The U.S. is putting a lot of pressure on Switzerland, as they want the cantonal banks to be treated the same way as the other Swiss banks,” said John Plassard, who helps oversee $28 billion as vice president at Mirabaud Securities LLP in Geneva. “Investors are nervous.”
Switzerland has been in talks with the U.S. for more than two years to resolve a Justice Department investigation of at least 14 financial institutions, including Basler Kantonalbank (BSKP), that allegedly helped Americans hide money from the Internal Revenue Service. An agreement could lead to total fines of as much as 10 billion Swiss francs ($10.4 billion), the Tages-Anzeiger reported.
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