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Swiss Bank Crackdown Accelerates As Credit Suisse, UBS Clients Raided In Germany, France

Tyler Durden's picture




 

While virtually every European risk indicator is now being gamed to underreport the true nature of the capital flow panic on the continent, one remains steadfast: Swiss nominal yields, which as we pointed out a month ago, have become the only true indicator of liquidity stress. And as noted this morning, Swiss 2 Year bond just hit a record nominal -0.37% (which coupled with record low yields in German yields explains everything about where money is sprinting to in Europe, and just how much "confidence" in the system is left). And while the SNB continues to suffer massive losses on its EURCHF peg, the reality is that it continues to offer a free put to all those who wish to move away from EUR exposure and into the relative safety of the CHF (the risk of cantonal disintegration is still relatively low). Which is why the only recourse authorities have in dealing with the now record flight to Swiss safety is brute force. Sure enough, as Reuters reports, clients of the two largest Swiss banks: Credit Suisse and UBS was raided in two independent, but likely linked, operations in Germany and France, respectively, in a show of force that moves beyond mere tax-evasion and has a goal of scaring anyone who still thinks of keeping their money in the relative safety of Geneva and Zurich bank vaults.

From Reuters:

German tax authorities have raided Credit Suisse clients and French officials searched the homes of UBS employees, deepening the crackdown on foreigners hiding money in Swiss offshore accounts to dodge taxes.

 

Switzerland's strict banking secrecy rules, which have helped build a $2 trillion offshore financial sector, have infuriated cash-strapped governments as they try to crack down on tax evasion by wealthy citizens.

 

Roughly 5,000 German clients of Credit Suisse are being probed on suspicion of tax evasion and some had their homes searched, a bank source said on Wednesday, as European tax officials broaden their investigation to include clients as well as banks.

 

Meanwhile, the offices of UBS in Lyon, Bordeaux and Strasbourg were raided on Tuesday on suspicion of money-laundering and aiding tax evasion, according to a bank source.

 

The private homes of several high-ranking UBS employees in Strasbourg were also searched, the source said.

And while events like these were normal in 2009 and 2010, following recent "tax-deals" between banks and sovereigns they were supposed to be a thing of the past. It appears that they are now back in vogue, as Europe reverts to the oldest type of capital controls: intimidation.

Credit Suisse struck a deal with Germany last September, which saw the bank pay 150 million euros ($183.83 million) to German tax authorities in a bid to end an investigation over allegations the bank and its employees helped Germans dodge taxes.

Germany and France, along with Britain, represent the largest markets in Europe for Swiss private banks.

The German investigation also comes against the backdrop of a deal struck with Switzerland to levy taxes on German funds stashed in Swiss bank accounts that is due to come into effect next year, a l though German lawmakers still have to approve it.

UBS was forced in 2009 to pay a fine and release the names of 4,500 clients to U.S. officials to end a damaging tax probe. U.S. authorities are still investigating Swiss banks including Credit Suisse and Julius Baer over tax offences.

Switzerland is trying to get the U.S. investigations dropped in exchange for the payment of fines and the transfer of names of thousands more U.S. bank clients.

Hopefully nobody is surprised by this: as the money runs out, 'events' such as these will become more frequent, until the authorities once again shift to confiscating that other non-money: precious metals. All for tax preservation purposes of course, as the much anticipated wholesale financial tax for everyone which we discussed in September 2011 is finally implemented.

 

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Wed, 07/11/2012 - 10:08 | 2605782 LULZBank
LULZBank's picture

RUNN BITCHEZZ!!!!

Wed, 07/11/2012 - 10:29 | 2605884 OttoMBMP
OttoMBMP's picture

German DIW institute proposes compulsory loans to get the money from "the rich" which in their definition is a net worth of > €250k ...

http://www.faz.net/aktuell/wirtschaft/wirtschaftspolitik/diw-vorschlag-oekonomen-kritisieren-zwangsanleihe-fuer-reiche-11816729.html

It's going fast now.

Wed, 07/11/2012 - 10:37 | 2605923 swissaustrian
swissaustrian's picture

DIW is union funded. What more to say?

Once the new left wing goverment dethrones Merkel next years, they'll certainly introduce higher income taxes and probably also a property tax.

Wed, 07/11/2012 - 10:49 | 2605994 Winston Churchill
Winston Churchill's picture

Events will move very fast now.

A new 'Krystalnacht' with the 'rich' as the target.

Hope you have made your preparations Otto.

Wed, 07/11/2012 - 11:04 | 2606067 OttoMBMP
OttoMBMP's picture

I have left the country ... ;-)

Wed, 07/11/2012 - 11:30 | 2606165 Alpacanio
Alpacanio's picture

Relax! It's only 724,000,000,000,000 to 0. It's only 2 minutes in the 4th quarter! Gold and Silver is coming off the bench BaBy! Wooot!!!

Wed, 07/11/2012 - 12:55 | 2606533 LowProfile
LowProfile's picture

Just make sure you hold them in a 1:10 ratio (gold to silver). 

Although it will soar in a near-apocalyptic scenario, if the central banks revalue a PM upwards to repair their balance sheets, it won't be silver...  Because they don't own any.

Wed, 07/11/2012 - 10:10 | 2605787 fnordfnordfnord
fnordfnordfnord's picture

V&

Wed, 07/11/2012 - 10:10 | 2605790 disabledvet
disabledvet's picture

And NOW it begins! This is no mere "gold manipulation." this is about stealing your MONEY. How original!

Wed, 07/11/2012 - 10:16 | 2605813 JR
JR's picture

Leaving no exits.

Wed, 07/11/2012 - 10:18 | 2605823 overmedicatedun...
overmedicatedundersexed's picture

repost seems apt:

one item which is not listed for the cliff of economic death: wealth confiscation. BK gov of all sizes must raise taxes, the gov or tax exempt growth of the last 4 years only shrunk the tax base everywhere.. so for business owners they know the bulls eye is even more focused on them..hiding wealth from the new taxes is becoming job one.

I maintain it was not tariffs that worsened the depression but the fear of wealth confiscation that caused more economic weakness in the depression now and then. obuma care is just a means to confiscate more, in MD the taxes are raised on over $100,000 tax units and a new Flush tax for septic tank owners to name 2.

Wed, 07/11/2012 - 10:35 | 2605911 ACP
ACP's picture

That exactly right. Apparently they didn't read "The Art of War," which suggests you leave the enemy one exit. They aren't doing that, which will make this situation very, very ugly.

Wed, 07/11/2012 - 10:49 | 2605995 TrumpXVI
TrumpXVI's picture

This ain't Gettysburg; it's more like The Wilderness.  Grab the enemy by the throat and don't let go until he's dead.

Wed, 07/11/2012 - 10:29 | 2605868 DeadFred
DeadFred's picture

Perhaps Merkel should cancel the tank sale to Indonesia and deploy the Leopards on the Swiss border. Put the fear of HE in those tax evaders. Of course she needs to stay on her side of the border. Afghanistan may be the biggest graveyard of empires but that's because no one even tries to invade Switzerland.

Wed, 07/11/2012 - 10:44 | 2605966 FeralSerf
FeralSerf's picture

Merkel knows how it's done with her years of experience with the Stasi.  They just shoot the Germans as they try to escape Germany and take the money and anything else the might have.  It's not Switzerland's affair -- she'd just be shooting Germans.   A big fence like what's on parts of America's southern border and Israel's border should help.

Wed, 07/11/2012 - 10:14 | 2605799 midgetrannyporn
midgetrannyporn's picture

The usa would never do that because our political class is subservient to the maggots.

Wed, 07/11/2012 - 10:18 | 2605825 CommunityStandard
CommunityStandard's picture

Not necessarily.  They'd like to have taxed the facebook dude who renounced citizenship.  You'll get raided unless you qualify for the "ex-Goldman exclusion".

Wed, 07/11/2012 - 10:19 | 2605835 midgetrannyporn
midgetrannyporn's picture

Mitt will clean up dodge. lulz

Wed, 07/11/2012 - 10:15 | 2605804 Winston of Oceania
Winston of Oceania's picture

"Hopefully nobody is surprised by this: as the money runs out, 'events' such as these will become more frequent, until the authorities once again shift to confiscating that other non-money: precious metals. All for tax preservation purposes of course, as the much anticipated wholesale financial tax for everyone which we discussed in September 2011 is finally implemented."

 

They will be coming for your 401K first, you know to shore up public and private union pensions. Of course they will institute a NATIONAL pension which they will roll SS into it and treat the whole new mess just the same, a slush fund to buy votes with. Humps...

Wed, 07/11/2012 - 10:17 | 2605820 Dr. Engali
Dr. Engali's picture

That's right. They have had a couple trial balloons. It won't be long before they use the fear of the market to do so. All these planned events are setting the stage for complete financial control from the central planners.

Wed, 07/11/2012 - 12:11 | 2606342 Debugas
Debugas's picture

this has already happened in many eastern european countries (Hungary for example nationalized all private pension funds and "returned" everyone to national pension system)

Wed, 07/11/2012 - 10:24 | 2605837 PaperBear
PaperBear's picture

"Roughly 5,000 German clients of Credit Suisse are being probed on suspicion of tax evasion and some had their homes searched, a bank source said on Wednesday, as European tax officials broaden their investigation to include clients as well as banks."

I trust there were court orders to go with the seizure of these homes.

Wed, 07/11/2012 - 10:34 | 2605905 swissaustrian
swissaustrian's picture

Probably yes, Germany actually follows the rule of law domestically. There isn't a police state like it is in the US. The German IRS is brutal but not as extreme as the US IRS. However, they purchase stolen banking data.

Wed, 07/11/2012 - 10:21 | 2605842 Inthemix96
Inthemix96's picture

More fucking manipulation?

Gosh, who would have thunk it................

Wed, 07/11/2012 - 10:29 | 2605881 Kaiser Sousa
Kaiser Sousa's picture

Far out man....I love how its all coming apart...
some a blunt, lay back and look at ur shinny Silver and Gold stuff and say FUCK ALL BANKERS & THEIR BITCH OWNED POLITICIANS....yeah man, really cool...

Wed, 07/11/2012 - 10:31 | 2605892 swissaustrian
swissaustrian's picture

The European markets are dead for Swiss banks, the smart private banks have already shifted towards Asia, Russia and the Gulf countries.

Swiss politicians are cowards doing whatever are big neighbours tell them. Banking secrecy is dead.

Ferdinand Lips predicted all of this in his great book: Gold Wars which you can read as a pdf here:

http://www.fame.org/pdf/Gold%20Wars%200-9710380-0-7%20%20-%2001.21.02.pdf

Wed, 07/11/2012 - 10:59 | 2606048 agent default
agent default's picture

Banking secrecy is also shifting to Asia like Shanghai and Macau.  Good luck intimidating China.

Wed, 07/11/2012 - 10:35 | 2605914 gnomon
gnomon's picture

Only when the chips are down does the mask truly fall.  Even in Republics (much less Social Democracies) citizens are subordinated, regardless of long-standing rules, tradition, and even Constitutional guarantees.

These pock-faced, grifting whores are the spawn of the Welfare State.  Embed a Welfare State in the heart of the most virtuous of Republics and soon (within decades) both the finances and the character of the people of these Republics turn to rot.

Most will get what they deserve, but not all.  And all will severely punished. 

Wed, 07/11/2012 - 10:41 | 2605949 uno
uno's picture

they need to raid the BVI and Cayman Islands banks, that's where the real scams are

Wed, 07/11/2012 - 10:51 | 2606002 FeralSerf
FeralSerf's picture

They need to raid the City of London banks and then the New York banks (+BAC).  That's where the real scams are.

Wed, 07/11/2012 - 10:45 | 2605969 digitalhermit
digitalhermit's picture

Got Bitcoin? Currency that can't be confiscated bitchez!

Wed, 07/11/2012 - 12:47 | 2606501 aphlaque_duck
aphlaque_duck's picture

I'm downvoting you beacuse this is something I don't understand, and is therefore dumb.

Wed, 07/11/2012 - 10:49 | 2605993 Catullus
Catullus's picture

Think they carefully catelogued the deposit boxes and the numbers and descriptions of the items? Or they know what was in which box? Or that they're not going to ask you to describe every item in detail and why exactly you placed it there in the first place?

Not a fucking a chance. Safety Deposit boxes are as much bullshit as corporate privacy statements. All bets are off when a thug in a state police costume shows up.

Wed, 07/11/2012 - 10:54 | 2606017 exodus11
exodus11's picture

Making it easy for the sheeple to figure out who the criminals are. Have to thank em.

Wed, 07/11/2012 - 11:00 | 2606049 Centurion9.41
Centurion9.41's picture

This is not a plug for Barton Biggs, but everyone should really read his introduction in Hedgehogging.  He relays a story of one of his wealthy Chinese clients who survived two revolutions.

The only thing of value people are able to keep is that which will be valued or needed after the politics shake out AND easily carried and hid; jewelry is an example, fine art, coins, collectibles, etc.

Likewise, in Europe during the WWs, the smart tradesmen and owners buried their tools in the ground.  Think about it. If you have a factory and you bury the key components, when the mob burns the factory down, the critical things that really allow one to separate themselves, besides their knowledge, are saved and retained.

Can't help but think the wealthy in Europe are telling similar stories to their children.

The non-wealthy, well they are probably telling their children stories about injustice, unfairness, and regurgitating proletariat and neo-facist propaganda.

You are living one of those periods, you've read in the history books, leading up to great violence and revolution.

Wed, 07/11/2012 - 11:45 | 2606225 bankruptcylawyer
bankruptcylawyer's picture

I can't agree with you more , but it will be intentionally and slowly let down. the great depression wasn't all at once. it was a slog, and the bankers controlled what they could control on the way down, as everyone suffered, including the self canibalizing banking system . 

 

as a lawyer , i'm trying to find a new way of making a living. in the long run, lawyering is useless to the society. i think we have a long long time until we get there but, it's starting already. I'm not banking on being able to 'get rich' and live well off savings. 

so what now? i suppose every individual and family has to find that out for themselves.

Wed, 07/11/2012 - 13:13 | 2606601 Centurion9.41
Centurion9.41's picture

Agree with controlled/slow motiong train crash of econ by bankers. 

As for the depression, we are in one.  The only reason we dont see shanty towns and soup lines is due to MBS being bought up by Fed and the gov. handing out food stamps; both of which merely mean the kids and grandkids are going to pay for it later. 

Nice thing about lawyering, people know it's highly likely you've got a good head on your shoulders and are willing to work hard; as you know most are not practicing law.  Hence why so few good lawyers end up at the bottom of the ladder.

Wed, 07/11/2012 - 11:23 | 2606149 BRIC-layer
BRIC-layer's picture

Wait until Hollande starts letting loose his plans for taxation by nationality (likely to be widely adopted within EZ?)

Wed, 07/11/2012 - 11:58 | 2606286 WallowaMountainMan
WallowaMountainMan's picture

let's see if my macroview is accurate. as the $wi$$ goes up, their businesses suffer, so the $wi$$ comptroller tries to keep their $wi$$ from rising.

can't they just print proportionally more $wi$$es and distribute them internally to the everyday people of $wi$$land and keep the home folk happy and prosperous as opposed to buying and storing junk money in thier computers?

is this not free to the $wi$$?

Wed, 07/11/2012 - 12:46 | 2606497 Ratscam
Ratscam's picture

Swiss politicians are wimps as they generally are all over the world. I am sure many foreign politicians have affiliations with Swiss accounts or structured SPVs. Why not release some information about Merkel, Hollande, Monti, etc. It would be a game changer.

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