Switzerland Struggles With Bank Secrecy Amid U.S. Pursuit of Tax Evaders

Switzerland, which has amassed $2.2 trillion of wealth-management assets from outside the country, is trying to shake off its reputation as a tax haven. Although perhaps not trying too hard. On June 19 its Parliament rejected a bill that would have allowed Swiss banks to cooperate with the U.S. and settle a long-running dispute over wealthy American tax evaders. The bill had been supported by the banks.

The rejection may set the stage for the U.S. to prosecute the banks. After being indicted, Wegelin & Co.—Switzerland’s oldest bank—pleaded guilty in January to helping U.S. taxpayers hide assets from the IRS. The bank had taken over clients from UBS, which avoided prosecution in 2009 by admitting it aided tax evasion, paying $780 million, and handing over client names. Wegelin sold its non-U.S. business and closed its doors.