It is well known that credit booms generally end poorly and are followed by poor economic performance. But it is less clear what causes that poor performance.
In January the private bank Wegelin & Co. closed after pleading guilty to US tax evasion charges having payed fines worth $74 million. Now Bank Frey & Co., announced that its shareholders had taken the decision to stop operating. Chairman Dr. Markus A. Frey released a statement via the company’s website saying that he regrets the painful decision profoundly:
Switzerland, in an effort to combat tax evasion and money laundering activities, has agreed to a deal with the Organisation for Economic Co-operation and Development (OECD) agreeing to exchange data with 60 other countries that will effectively end its banking secrecy.
Switzerland’s investigation of possible manipulation of foreign exchange rates, announced Friday, is now one of at least five cases that are currently being scrutinized world-wide. Others include investigations into benchmarks for crude oil and the swaps market as well as Libor interest rates.