GENEVA - Swiss banks must lure affluent clients from emerging markets or face a "slow death" as the pursuit of tax dodgers by U.S. and European authorities results in outflows of assets.
Western Europeans may pull as much as 135 billion francs ($139 billion), or 15 percent of their holdings, from Swiss banks, said Herbert Hensle of Cap Gemini. Bank Sarasin & Cie. AG reported last week that private clients withdrew 3 billion francs from Swiss locations in the year through June.
Switzerland built the world's biggest offshore wealth center during an era of "black money" that ended when the U.S. sued UBS AG three years ago. Many of the highest fee-generating European and American customers are withdrawing funds as the hunt for tax evaders widens. As many as 100 Swiss banks will vanish, according to Vontobel Holding Chief Executive Officer Zeno Staub.
"It will not be a big bang, but an erosion as amnesty programs are put together and as clients declare themselves and come clean," said Francois Reyl, chief executive officer of Geneva-based Reyl Group, which manages 5.5 billion francs of assets. "Those banks which don't adapt will die a slow death."
Some banks are already under pressure. EFG International, the Swiss bank controlled by billionaire Spiro Latsis, last month reported outflows from continental Europe in the first half, while net new money from private clients at Vontobel fell 86 percent to 100 million francs from a year earlier.
Switzerland passed bank secrecy laws in 1934 after bankers of Basler Handelsbank were arrested in Paris two years earlier for aiding tax evasion by wealthy French clients. Swiss banks amassed one-third of the world's offshore wealth over the next 75 years, before the U.S. government sued UBS on Feb. 19, 2009, to force the disclosure of 52,000 American customers who allegedly hid undeclared assets in Swiss accounts.
Five days after the U.S. filed the UBS lawsuit, Ivan Pictet, then managing partner of Geneva's biggest wealth manager Pictet & Cie., said Switzerland's banking industry may shrink by half if the country abandons secrecy.
Three years on, Raymond Baer, honorary chairman of Julius Baer Group, said "banking secrecy, as we know it, is history."
Western Europeans may pull as much as 135 billion francs ($139 billion), or 15 percent of their holdings, from Swiss banks, said Herbert Hensle of Cap Gemini. Bank Sarasin & Cie. AG reported last week that private clients withdrew 3 billion francs from Swiss locations in the year through June.
Switzerland built the world's biggest offshore wealth center during an era of "black money" that ended when the U.S. sued UBS AG three years ago. Many of the highest fee-generating European and American customers are withdrawing funds as the hunt for tax evaders widens. As many as 100 Swiss banks will vanish, according to Vontobel Holding Chief Executive Officer Zeno Staub.
"It will not be a big bang, but an erosion as amnesty programs are put together and as clients declare themselves and come clean," said Francois Reyl, chief executive officer of Geneva-based Reyl Group, which manages 5.5 billion francs of assets. "Those banks which don't adapt will die a slow death."
Some banks are already under pressure. EFG International, the Swiss bank controlled by billionaire Spiro Latsis, last month reported outflows from continental Europe in the first half, while net new money from private clients at Vontobel fell 86 percent to 100 million francs from a year earlier.
Switzerland passed bank secrecy laws in 1934 after bankers of Basler Handelsbank were arrested in Paris two years earlier for aiding tax evasion by wealthy French clients. Swiss banks amassed one-third of the world's offshore wealth over the next 75 years, before the U.S. government sued UBS on Feb. 19, 2009, to force the disclosure of 52,000 American customers who allegedly hid undeclared assets in Swiss accounts.
Five days after the U.S. filed the UBS lawsuit, Ivan Pictet, then managing partner of Geneva's biggest wealth manager Pictet & Cie., said Switzerland's banking industry may shrink by half if the country abandons secrecy.
Three years on, Raymond Baer, honorary chairman of Julius Baer Group, said "banking secrecy, as we know it, is history."
