Banks cannot die but can be fined

Press conference by Michel Barnier, Member of the EC, on the new framework for bank recovery and resolution. (EC Audiovisual Services)

Press conference by Michel Barnier, Member of the EC, on the new framework for bank recovery and resolution. (EC Audiovisual Services)

The oldest Swiss bank was forced to temporarily shut down its US subsidiary yesterday, after its lawyers accepted that it has being helping at least 100 American citizens to avoid taxation. The bank Vegelin, of St Gallen, established in 1741 is accused by the US tax authority, the famous IRS, that it has directed those citizens to hide incomes of at least $1.2 billion for ten years.

The bank accepted the accusation and agreed to pay a fine of $58 million. This is the first Swiss bank forced to shut down its US branch.Over the past few years the American economic authorities have being very active in monitoring and exposing tax evasion and other illegal activities practiced by foreign banks. Only last month British bank HSBC accepted to pay a huge fine of $1.9 billion and cut down its American business in a settlement with the American Justice Department. By the same token UBS the giant Swiss bank recently accepted to pay fines to US, British and Swiss authorities of up to $1.4 billion on Libor setting fraudulent activities.

It is interesting to notice that over the past three years and more precisely after the big credit crunch destroyed Lehman Brothers, sending the world to an unseen before financial crisis, economic authorities all over the developed world discovered that a number of big banking groups are “systemic” and cannot die. As a result they had to be refinanced with taxpayers’ money and zero cost loans from central banks.

At the same time however economic authorities in the US and Europe discovered also that all those banks were implicated to a series of fraudulent and lucrative activities, from tax evasion to organised criminal schemes aiming to set prices in various markets according to their interests. However those major banking firms cannot be shut down, because they have managed to hold hostage the very function of modern economies.

Given that, authorities have now embarked on a series of investigations and penal procedures against those bank activities and try to contain them. The aim is to force lenders to return to their basic functions, which are to accept and safeguard deposits and give loans. This is not an easy task given that banking firms are now spending a lot of money on public relations to influence the authorities and their political bosses.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

A call for a new crop of innovators

Caspian Sea deal an invaluable step towards easing regional tensions, says UN Chief

What happens when you toss your water bottle in the trash?

We need to rethink the way we heat ourselves. Here’s why

Focus on EU’s external action and building our stronger inner core: von der Leyen at the Special European Council

EU Court of Justice invalidates Safe Harbour and the game for thousands US businesses suddenly changes

Snowden is the “EU nomination” for this year’s Oscars

‘Millions facing starvation’ – Global political and business leaders on the economic impact of COVID-19

How digital can transform healthcare in Asia for millions of people

We can meet the SDGs using the wisdom of crowds. Here’s how

We need a new approach to cutting greenhouse gas emissions: and it’s all about innovation

Moving from commitment to action on LGBTI equality

Deutsche Bank slammed by the US-based trio of IMF, Fed and Moody’s

French elections: by the time the EU economy revives and the migration crisis is solved extremists could take over Europe

VAT Gap: EU countries lost €137 billion in VAT revenues in 2017

Black babies more likely to survive when cared for by Black doctors, suggests new study

Vaccines: from miracle to possible danger

UN lauds special chemistry of the periodic table, kicking off 150th anniversary celebrations

COVID-19 and nature are linked. So should be the recovery.

LGBTQ+ inclusion on the other side of the screen

We can’t wait to act on emissions. Here’s how to get to net zero

On International Youth Day the European Youth Forum calls for true youth participation

The great sustainable reset: The new world of work after the pandemic

Syria: UN health agency highlights ‘critical health threats’ facing Idlib civilians

Health: The neglected aspect of climate change

Resilience in times of pandemic

Companies can help build a more inclusive world. Here’s how

International World Summit Award calls for outstanding digital applications with impact on society from 178 UN member states

FEATURE: Niger’s girls find sanctuary in fistula treatment centres

Phone lines open between Ethiopia and Eritrea, and people are calling strangers

France and Germany can’t reach consensus regarding EU’s top jobs

An ECB banker wants to change the European social model

Cancer is a growing global threat and prevention is key, UN study shows

Where are the world’s nuclear weapons?

How scientists are turning living cells into the tiny factories of the future

Four million have now fled Venezuela, UN ramps up aid to children who remain

Q&A: EU-China Comprehensive Agreement on Investment (CAI)

UN Security Council welcomes results of Mali’s presidential elections

Calculators didn’t replace mathematicians, and AI won’t replace humans

EU lawmakers vote to reintroduce visas for Americans over “reciprocity principle”

Western Sahara: a ‘peaceful solution’ to conflict is possible, says UN envoy

London wants new skyscrapers to protect cyclists from wind tunnels

4 ways to become a ‘business baobab’ on the African economic landscape

5 ways to fast-track the transition to a carbon neutral world

EU-US trade deal: Europe to Americanize its social model?

Why quantum computing could make today’s cybersecurity obsolete

European Union supports survivors of sexual violence in conflict

Iraq: UN demining agency rejects desecration accusations, involving historic Mosul churches

UN chief welcomes power-sharing deal between Sudanese military and opposition

How banks should prepare for robots going rogue

Merkel, Mercedes and Volkswagen to abolish European democracy

“Hasta la vista” Google says to Spain and now Europe is next?

These 4 trends are shaping the future of your job

Visiting North Korea, UN relief chief spotlights funding shortfall to meet humanitarian needs

In Rwanda, high-speed drones are delivering blood to remote communities

Focus on EU’s external action and building our stronger inner core: von der Leyen at the Special European Council

FROM THE FIELD: Niger supporting the most vulnerable, as crises mount

Russia is ready for its Phase 3 evaluation once it fulfills high-priority recommendation

New EU short-stay visas: more advantages for legitimate travellers

How to keep our cities cool as temperatures rise

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s