French kings found the ideal refuge for their wealth: a city-state nestled between the snow-capped Alps and the pristine waters of Lake Geneva. Catholic royalty flocked to Geneva in the 18th century in an effort to conceal their dealings with Protestant bankers.
By 1713, the authorities in Geneva, who would gain a reputation for discretion, introduced rules banning bankers from revealing details about their clients.
That centuries-old code of silence, which was later enshrined in law in Switzerland, came under renewed focus this week after a leak of Credit Suisse data revealed its clients were involved in torture, drug trafficking, money laundering, corruption and other serious crimes, suggesting widespread failures of due diligence by the bank.
The disclosures prompted a national debate in Switzerland, even though the much-heralded “end of banking secrecy as we know it” was supposed to have occurred in 2014, when ministers from 50 countries and territories agreed to a global exchange of information about their respective taxpayers’ financial information for the first time.
The ministerial meeting in Paris that year was deemed monumental, not least because the enfant terrible of banking had reluctantly agreed to join the club. Switzerland had promised to share information about client bank accounts with participating tax authorities around the world.
For a country that had criminalised sharing client information with foreign countries for more than 80 years, adoption of the so-called common reporting standard (CRS) was a significant step. It meant Switzerland and fellow signatories would exchange information about foreigners who held bank accounts in their countries, as part of efforts to crack down on tax evasion and fraud.
However, even after Swiss CRS data started changing hands in 2018, critics argued the country’s commitment to the system had created a “zebra strategy”.
On the one hand, Switzerland’s banks could take “clean” money from clients in…