Swiss bank disclosed ex-Taiwan's president bank info. Why would they do this, against their principles?

Question

I thought Swiss banks are sworn to secrecy unless the money is related to terrorism. Surprisingly, they disclosed the bank transactions of Taiwan's ex-president, a transaction that post no terrorist threat whatsoever. This completely contravene their age-old principle of secrecy for all their depositors. Won't this hurt their reputation. What or who could possibly make them do such a thing? Can someone please enlighten me. Thanks!

Answer 1

Real privacy in Switzerland and other offshore jurisdictions has been an illusion for a long time.  They are now dominated by big banks with little interest in client's privacy.  While jurisdictional privacy and asset protection is legally and technically available in Switz. - in practicality, operational (useful) privacy is weak - to serious predators. (With some exceptions and comprehensive strategies - over the heads of bankers).

Privacy, for instance, in Israel has historically been vastly superior to Swiss - why?  Because Israel as a culture living in predatory circumstances, has a vested interest in its own privacy and security.  Swiss bankers: its about the money.  

Chen Shui-bian is a political target and the Swiss are for sale.    Singapore privacy is a joke and Cayman is essentially in the fund management business.  20 years ago the Swiss would have closed their doors in the face of prosecutors in order to preserve their credibility.  The Swiss - today they are too busy sucking up to the opportunities to make enormous profits exploiting capital markets and neat tricks like putting trillions of private money at risk in sub prime garbage paper - why risk it for a little client service? (this is not a statement about the lack of ethics of Shui-bian.) The big banks lost $13 trillion of private US and European assets in the 2000-2002 tech crash - but they make so much - hey, who cares.  The big banks dominate the offshore world and the old world boutique service oriented privacy has gone bye bye.  

Secondly, Switzerland and the offshore world used to be psychologically and culturally far far away - not any more -the world has shrunk dramatically in the last 30 years.  Regulators and prosecutors are now quite comfortable in this domain - but this only in the legal channels.  The more dangerous threat to privacy is the skilled operatives who can navigate these jurisdictions almost effortlessly - for ANY client.    While Swiss and other offshore financial jurisdictions can certainly be throwing a log in the path of predators - it is far too easily compromised by serious professionals (historically very high level operatives and not available to regulators and the public at large)  Real privacy is a sophisticated process that takes real professionals to manage - think military level protocols.  Some sort of real privacy exists in fly-by-night jurisdictions like goofy jurisdictions like Nauru, but the more privacy the less reciprocity - chance off getting ripped off right and left are far to high for serious money to seek safe haven in these places. Good for terrorist - they just shoot the bankers if they try to rip them off.  

But here is the point of this little essay - the real purpose and needs of banking privacy:

What Americans don't get - is that the offshore privacy is not about tax evasion and drug dealers - which are only minor players in the game. There is a very real and legitimate need for safe financial havens - that is the the preservation of private wealth from corrupt governments, organized crime, and other predators.  This is the supply line for free market capitalism, and world stability - not your friendly taxman or socialist bureaucracy.  Unfortunately, the crooks including the bankers (you know, the same ethical bankrupt idiots who have crashed the global economy) have brought down the privacy walls on the offshore banks.  

We in the US have never had generations of family wealth stolen during a coup or a war.  We have not lived through a Hitler, Stalin, Mussolini, Hirohito, Mao, and a zillion minor corrupt despots around the world; or the Yakusas, Triads, and Medellin cartels holding the populace hostage.  The rest of the world has, and knows it is only a matter of time - until the next massive extortion takes place.  The US is a tax haven compared to most of the world and we live in an extraordinary bubble of security in this country.  Wealthy people in Sao Paolo for instance have hostage insurance on their children and don't take their limo home from the airport - too dangerous - they take a helicopter - and this is a premier up and coming BRIC nation.   Organized crime has reached a globalized level exceeding NGOs and most governments - and they are all interlaced with dangerous political regimes, terror, drugs, human trafficking... The world is getting crazier by the minute.  

Incidental - Privacy for EU citizens account holders sequestered away in Switz., Gibraltar, etc. will disappear next year (2009) - or these banks will withhold 30-35% of income on the accounts and ship it to Brussels - no questions asked.  Bye bye.  And by the way, if someone tries to sell you (as a US citizen) an offshore company to avoid paying taxes - don't even think about it!  Remember, we are still a tax haven compared to many - and we can still drive home from the airport in peace.)

Welcome to a world where childish politician like Obabble I Will-Change-The World-Obama have no clue about what the dangers are - God help us!  I hope this is useful to someone!    

Answer 2

Not only that, Swiss Bank also disclosed Indonesia Ex-President Bank`s Account Balance to the world. I think their sums of transactions are too large.

They have the responsibilities and liabilities to tell the Central Bank of the particular country where the monetaries come from to check their account and watch their back.

Answer 3

Maybe the ex-Taiwan president was a terrorist or he was unfortunatly related to terrorist  and it wasn't his fault but they had to release his banking info to investigate the situation. that's bad luck so lucky we aren't from Taiwan.

Answer 4

I can only speculate, but Taiwan is technically not a country, so this may be part of the reason for this exception to the rules.  Should Mr Chen or his wife abscond to the US, there is little recourse for justice in this case.  Because of Taiwan's political status, fleeing to the US with stolen money is a common practice among Taiwanese embezzlers.