Offshore Banking Shifts to Asia
Yesterday's New York Times had an interesting article on offshore banking. Apparently, following the shameful conduct of UBS and the Swiss government (yes, shameful), hundreds of billions of dollars left Swiss bank accounts and moved to Singapore and Hong Kong. It is estimated that at least $200 billion left UBS alone.
The move to Singapore and Hong Kong is interpreted by the New York Times as a move to regain banking privacy. These jurisdictions have very strong banking privacy laws, particularly Singapore. Even UBS has apparently generated more new business in Singapore than it lost in Switzerland.
Does anyone else see the folly of this logic?
Switzerland for centuries was considered a haven for banking privacy. No more. What is different about Singapore? If tomorrow the Justice Department goes after Singapore-based bank accounts, why would Singapore not cave? Is it immune to the ability of the US government to cut off dollar denominated transactions? The Swiss were not.
What I really do not understand is how UBS can be picking up new business in Singapore. Maybe there is no access to the news in Singapore, and that entire region is unaware of how UBS sold out its clients to keep its US business? Why would anyone expect UBS to act differently if the same chain of events unfolded in Asia?
If you are seeking privacy for your offshore bank account there is only one simple thing you need to remember. Do not bank with any banking institution that does business in the US.
Link to NY Times article: http://www.nytimes.com/2010/09/23/business/global/23swiss.html?_r=4&ref=business