Bank secrecy, Switzerland, Swiss banks
Banks under the protection of secrecy are forbidden to give out information about the accounts of their customers to the authorities unless there are special circumstances, such as filed criminal complaints about the customers (Kingsbury, 2009). The main features of banks that provide bank secrecy include personalized customer care and more advanced security systems to safeguard both identity and capital of the customer. For these reasons, their services are more expensive than similar services by regular banks (Cartwright, 2005).
In Switzerland, Bank secrecy was created by the Swiss-banking act in 1934 and resulted in the formation of the world famous Swiss bank. Bank secrecy is one of the fundamental principles of private banking. Creation of private banking is Switzerland saw the emergence of Swiss banks as the most-reputable banks in the world. Literature and films portray them model-banking systems where all the influential persons, celebrities and leading politicians have accounts. In the list of people in the list of prominent Frenchmen with Swiss accounts included the richest men in France in the day, including the Peugeot brother among other wealthy families.
[...] This is not the case with private banking. The cons of private banking outweigh the pros by far, for this reason, private banking brings more problems that solutions and is, therefore, unsuitable. Unless major improvements are made, current trends will lead to the total destabilization and eventual demise of these banking systems (Kingsbury, 2009). Bibliography Blum, J. A., & United Nations Office for Drug Control and Crime Prevention. (1998). Financial havens, banking secrecy and money- laundering. New York: United Nations. [...]
[...] Swiss Bank Corporation. (1983). Banking secrecy and mutual assistance in criminal matters. S.l.: S.B.S. Dilley, D. K. (2008). Essentials of banking. Hoboken, N.J: Wiley. [...]
[...] The problem of tax evasions is so grave that in Greece, an estimated of the G.D.P is lost due to tax evasion. All these have led to about 30 propositions to counteract the threat of secret banking in Europe. Austria and Luxemburg are showing signs of cracking under the pressure of the European countries, especially Germany. A minister in Austria, Feynman recently suggested that the Austria government and the Luxemburg government are in talks to reduce their legislature in regards to taxes. [...]
[...] The problem is, therefore, not internal to secret banking but to people and the process. The problems are just a manifestation of the processes of people that make use of the process (Kingsbury, 2009). It is worth noting that when government has too much power, they may misuse it against the people. Private banking provides people with a form of security against excessive government control (Cartwright, 2005). This property was demonstrated in the course of the Second World War where the Swiss banks helped stash the capital for the Jews who had the ability to move their money to them. [...]
[...] However, illegal transactions conducted through mobile money transfer from these private accounts facilitate business activities that are illegal in nature (Kingsbury, 2009). Such movement is untraceable and therefore the government agencies are losing the fight against organized crime. In Africa and other third world countries, influential people steal from the state and hide the money in banks that provide private or secret banking, for example, during a recent case in Kenya referred to as the Goldenberg scandal, perpetrators used nonexistent businesses to move money overseas, where it is untraceable. [...]
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