Syndicated news with introduction by Nomad
Swiss banking giant Credit Suisse has admitted that it conspired to help some US clients avoid paying taxes. It has agreed to pay over $2.5 billion and to cooperate with investigations.
This would make the Swiss company the largest bank in 20 years to plead guilty to criminal charges.
As much as I think this is a good- and long overdue- step, imposing a fine on Swiss banks for helping Americans hide their wealth is a little like punishing dogs for peeing on fire hydrants. It's what they do. There's nothing very "brazen" about either case.
Perhaps the only surprising aspect of this news is that the US government found the wherewithal to actually do anything about it. As Forbes describes the news, the IRS took on Swiss banking and it won. According to that article, IRS is the big winner in this plea bargain arrangement.
Plus, the IRS earns dividends in the form of account holders applying for amnesty. And for the IRS, it isn’t just Switzerland, but everywhere now that FATCA has expanded U.S. tentacles almost worldwide. Attorney General Eric Holder wins big too, getting the benefit of a guilty plea. He can’t be accused of letting another big bank off the hook for being too big to fail.The U.S. Treasury and New York State both make out well. Credit Suisse will pay nearly $1.8 billion to the Justice Department, $100 to the Federal Reserve, and a whopping $715 million to New York’s Department of Financial Services.
With FATCA approaching its launching date, some would see this in a little less cheery light. The US, they'd say, is simply attempting to assert its control over all international banks.
Amid all this back slapping, and at a time when Putin is threatening to renew a Cold War, what is left unsaid is that the long-term consequences may be hard to calculate.
Credit Suisse guilty on US felony charge, pays $2.6 bn (via AFP)
Credit Suisse pleaded guilty and was fined $2.6 billion for helping Americans avoid taxes, the first time in 20 years a major bank has been punished on US criminal charges. US authorities said the "brazen" Swiss bank, one of the world's largest wealth…