It is true that the Obama Administration has not gone after any of the bank’s bigwigs.
Given the well established pattern of deceit organized by Credit Suisse to help 22,000 Americans evade their taxes, this comes as an unpleasant surprise. A bank cannot have unmarked offices, elevators that are operated by remote control, and financial statements that are sneaked to the clients inside copies of Sports Illustrated (perhaps even the Swimsuit Special Edition!) without the knowledge of the institution’s leadership. It is therefore impossible to understand that only seven mid-level executives have been charged by the U.S. Justice Department.
However, Credit Suisse is selling assets to keep its TIER 1 ratios after the fine. This is unprecedented, and breaks a dangerous pattern in the banking industry: that fines are simply some sort of operational cost. At a time whenall European banks are scrambling to be as solvent as they can in preparation for the stress tests, BNP Paribas’ executives will no doubt remain worried about the potential $3.5 bn. fine that the U.S. Department of Justice can levy on them.
All this does not mean that the fine has necessarily been tough enough. Perhaps Credit Suisse’s U.S. banking license should have been revoked. A better option would have been simply demanding Credit Suisse to release the names of all its U.S. clients that were hiding their stash in the Alps, but that would have probably meant Dougan’s resignation. For some reason, the Swiss government asked the US not to do it.
However, the fine is big enough to make the cost of helping tax evaders well beyond the usual operational expenses of a large bank. This is a big change, although it still leaves many open questions, such as:
*Will the U.S. do the same with other banks (including big American institutions) and establish that as a policy?
*Will other jurisdictions imitate the U.S.?
*Will they apply the same pressure to other tax havens as they are to Switzerland?
*Will Republican Senator and Tea Party favorite Rand Paul stop blocking the U.S. Senate ratification of the 2009 tax agreement between the U.S. and Switzerland that eliminates part of the Swiss bank secrecy laws?
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