Swiss bank agrees to disclose names of US clients

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From Fazle Rashid
NEW YORK, Aug 20: The battle is over. UBS, the giant Swiss bank, has finally relented and agreed to hand over the names of its American clients, suspected to have dodged paying taxes, to Internal Revenue Services (IRS).
IRS suspects more than 4400 Americans have accounts with the Swiss bank for tax evasion. The agreement will surely unnerve people worldwide who have stashed stolen money in Swiss banks.
Whether the deal will change the Swiss banking industry's culture of secrecy will remain to be seen, said the New York Times (NYT) in a front page report today. Small Swiss banks will perhaps reap a windfall. They are confident that they can blunt its effects and continue to profit finding new more elaborate way to protect the privacy of the clients, NYT said.
IRS has made it clear that its drive to chase the tax dodgers will not end.
The agreement covers 4450 US accounts at the UBS with total running to well over $18 billion. The US account holders will have the option to appeal against the agreement in the Swiss court.
Washington has hailed the deal as a victory in its clampdown on tax evasion and indicated that it would pursue other foreign banks and tax cheats.
Swiss bank giants like the UBS and Credit Suisse have curtailed banking services for the wealthy Americans in response to the increased scrutiny.
In the meanwhile, investors dismayed by the snail's pace of global economic turnaround are looking to China to help lift the global economy at a much faster pace. But the fears that China's muscular expansion could weaken turned the country's main stock index into a bear market clouding hopes of faster recovery, NYT said.
Much against the general run of economy around the world China's economy grew by 7.1 per cent and propelled a 90 per cent rise in Shanghai market. The analysts say China's strategy has been to expand investments rather than consumption setting the stage for unbalanced growth, a surge in bad loans and mounting government debt.
The experts now say Chinese banks must now think about reining-in aggressive lending. China's central bank called for tighter supervision of loans and China's Banking Regulatory Commission has ordered banks to raise their reserve ratios for bad loans.
In the US, the Wall Street is now occupied by two new developments. Who will be Ben Bernanke's successor as the chairman of the Fed reserve and US SEC's proposal to allow shareholders the power to nominate company directors directly. Bernanke, though a Republican, is likely to earn a second term as Fed chief. He and Fed have come under political fire from lawmakers in both parties over the handling of bailout fund and the scope of Fed's power.
In another development, the number of companies defaulting on their debts has risen to records levels this year according to Standard and Poor (S&P). S&P said over 200 borrowers with debts running to $453 billions have defaulted this year exceeding 126 defaults recorded in 2008 with debts of $433 billion..
Recessionary economic conditions and ongoing uncertainty in the financial markets have pushed the number of corporate casualties higher, an analyst said.