World Should Demand Swiss End 1,000-Franc Note, Summers Writesby
U.S. former Treasury chief cites Swiss illicit finance history
SNB President Jordan has said won't reconsider denominations
The Swiss National Bank should stop issuing its most valuable 1,000-franc ($1,032) bills to hamper criminal activity, former U.S. Treasury Secretary Lawrence Summers said.
With euro-area officials having just last week announced plans to discontinue the 500-euro ($569) note -- their highest denomination -- Summers turned the focus toward Switzerland, saying the country had a “long and unfortunate history with illicit finance.”
“The world should demand that Switzerland stops issuing 1,000-franc notes,” Summers, now a professor at Harvard, wrote in an opinion piece published in the Financial Times on Monday. “After Europe’s bold step, these notes will stand out as the hard-currency world’s highest denomination note by a wide margin.”
The European Central Bank announced this month it would stop producing the 500-euro notes around the end of 2018 on the grounds they could facilitate illicit activities. The thinking is that making wads of cash more cumbersome would render life harder for criminals, terrorists, tax evaders and corrupt officials.
Switzerland’s decision to continue issuing large-denomination bills could affect its reputation in international financial circles in the wake of pressure from the U.S., Germany and other countries to all but give up banking secrecy for offshore accounts.
SNB President Thomas Jordan said last month there are no plans to adjust what denominations of bills get issued. SNB spokeswoman Silvia Oppliger declined to comment on Summers’s suggestion.
Speaking more generally, Summers said the matter of cash facilitating crime should be placed on the agenda of the Group of 20 countries. Switzerland isn’t a member of that body.
“There would be a strong case for stopping the production of notes with value greater than, perhaps, $50,” he said. There may also be a need for greater cooperation to ensure that new financial technologies, such as Bitcoin, “don’t become vehicles for facilitating illicit transactions.”