Scenes From the Shadowy World of Swiss Banking


The Swiss banking industry is a $7 trillion secret.

It holds a third of the world’s offshore assets, including, say critics, the cash of dictators, despots, gangsters, and arms dealers—all protected by Switzerland’s strict banking secrecy laws.

UBS and Credit Suisse, which together account for half of the Swiss banking industry, are neighbors on Zurich’s Paradeplatz—one of the most expensive pieces of real estate in Switzerland. They’re said to own vast vaults beneath the square, containing gold, cash, and enough secrets to feed a myriad of spy novels and thrillers.

But the attitude toward what was once a source of national pride is shifting, fueled by politicians and even shareholders disenchanted with the apparent arrogance, incompetence, and venality exposed by huge losses, scandals, and galling bonus payments at the banks. UBS Chief Executive Officer Oswald Grübel resigned in 2011 after a rogue trader in London lost more than $2 billion, while in 2014, Credit Suisse pleaded guilty to helping Americans evade taxes and agreed to pay $2.6 billion. Meanwhile, smaller private banking outfits have banned their employees from traveling to the U.S. for fear of arrest.

Some Swiss call a clampdown on the banks an "economic war," but there are widespread calls for greater supervision and tighter regulation. Even the hallowed banking secrecy law itself is under threat after the Swiss government agreed to hand over the names of 4,450 Americans with accounts at UBS after the bank was caught red-handed using secret codes and encrypted computers to help them dodge taxes.

Switzerland avoided being blacklisted by the OECD by bowing to political pressure and agreeing to adopt international standards used by 60 countries to exchange information on account holders. A new U.S. law is also fostering bank-to-government data sharing designed to throw light on difficult-to-trace accounts.

The spotlight is an uncomfortable place for an industry built in the shadows. — Photographs by Mark Henley/Panos Pictures