Switzerland may become the first country in the world to have only white money

Every country has a certain amount of black money, however small or large.

Under new rules proposed by Switzerland’s Finance Minister Eveline Widmer-Schlumphttp://www.blogger.com/img/blank.giff, Switzerland could become the first country in the world to have only white money.

Swiss banks would be required not only to obtain a declaration from their foreign clients confirming that their assets held in Switzerland are correctly taxed, but Swiss banks would also be required to investigate cases of suspected tax evasion, or cases involving, for example, cash payments from an unknown origin.

How this will fully work in practice remains to be seen, but it has actually been increasingly the case anyway (see http://www.wolfsberg-principles.com)

Interestingly, this is so little known outside the world of banks that Wikipedia doesn't even have an entry on it.

For example, the concept of "politically exposed persons" (PEPs) was invented in Switzerland and popularised because Switzerland took it to other parts of the world, so that PEPs now find it increasingly difficult to park their money abroad.

The Swiss Finance Minister's proposals have been debated widely in the country and, so far as I can see, there is no opposition to them at all, though some people are concerned that Switzerland should not move unilaterally too fast. Of course, if Switzerland moves slowly and waits to have global consensus, that will still mean that Switzerland will have led the way, but it is better for it to move fast and become the first country to have such legislation for all clients.

There is a similar model already in operation in Liechtenstein, but that applies only to British clients.

Why is there so much support for the proposals from the Swiss banking community? Because Switzerland still has more of a moral sense from its Protestant heritage, and because the Swiss are convinced that, in a genuinely level playing field, they can outperform competition from other countries in terms of banking and financial skills, so that foreigners will continue to park at least a part of their assets here.

In fact, there is plenty of evidence that many people were earlier not putting their money into Switzerland at all, because of the popular suspicion that there was still huge amounts of black money here. Of course, there were always people who have declared their money and paid their taxes who put their money in Switzerland, but with the decline of suspicion regarding Switzerland, many more such people are feeling encouraged to put their money in Switzerland .

Why would they do that? Because commonsense tells you that it is not wise to have all your eggs in one basket. So white money will continue to flow into Switzerland on the best possible and only sustainable basis: portfolio diversification, currency diversification, political stability, and sheer quality of expertise and service.

In fact, many Swiss banks feel that much more money will flow into Switzerland once it becomes clear that all the money here really is white.

Meanwhile, the US is now (or soon will be) the largest holder of black money in the world. Who is going to force the US into cleaning itself up? Sphere: Related Content