Pity Hollywood. The credit crunch has killed -- or at least maimed -- one of the favored tropes of spy movies and action thrillers: the secretive Swiss bank. Celluloid terrorists and criminals (and probably a few real ones, too) used them to stash their ill-gotten gains, and uber-assassin Jason Bourne found secrets to his true identity (and a gun and wads of cash) in an Alpine vault.
By and large, the Swiss bank as Hollywood knew it no longer exists. U.S. officials have long wanted to make a dent in the European nation's famed banking secrecy laws; they saw it as a refuge for tax evaders and terrorist financiers. In June, they secured a guilty plea from Bradley Birkenfeld, a former banker for Zurich-based UBS who admitted to helping a wealthy California businessman hide assets from the IRS. The always-helpful Birkenfeld even smuggled diamonds in a tube of toothpaste on a flight into the U.S. for his client. Then, in February, UBS agreed to hand over to U.S. authorities the names of 300 clients -- it was the first breach of Swiss secrecy laws since 1934, according to Bloomberg. In March, Switzerland and other offshore banking havens (including Luxembourg and Austria) caved more formally, with government officials agreeing to share tax information with the U.S. and other countries.
The whole saga has made big news in Europe, but barely been noticed in the U.S., which is too bad -- and not just because of its impact on Hollywood. In some ways it's a mini-parable of the financial crisis: Switzerland's private banks grew rich thanks to lax government interference and dodgy, sometimes illegal activities. Now governments around the world are calling for greater transparency and more oversight (sound familiar?), in part to shore up their crumbling tax bases, which have been hard-hit by the recession. And the bankers themselves have been prosecuted (see: Birkenfeld) and vilified -- last week the Financial Times reported that many are afraid to travel internationally, for fear of being apprehended.
I don't see too many negatives here; few will cry over the loss of a tax haven for the moneyed elite. And Hollywood may have lost a favored plot device, but never fear -- it can always make a movie about the end of offshore banking. A well-dressed executive huddled over a bathroom sink, stuffing diamonds into a tube of Colgate -- that'd make a great visual.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
