Private banks: Leaks present physical and semantic challenges
Majority of banks say focus on tax evasion to blame; ‘Secrecy’ now ‘confidentiality’, tax ‘avoidance’ now ‘evasion’?
The latest in a line of leaks of client data from private banks has thrown the question of privacy and secrecy into the limelight again.
In January, Rudolf Elmer, former chief operating officer of Julius Baer, handed over information on 2,000 cross-border accounts held at his previous employer to whistleblower website WikiLeaks. Elmer said he wanted to reveal how the cross-border system facilitated tax evasion and the damage this was doing to society.
Last year two former employees of HSBC Holdings leaked files of thousands of wealthy clients at the firm’s Swiss private banking arm to several European governments to help them clamp down on tax evasion. In 2008, Germany paid €4.2 million to a bank employee for stolen data on clients from Liechtenstein bank LGT.
Such leaks are a cause of growing concern for private clients, who often use private banks and offshore centres to book their money for reasons of security.
"Perhaps not in the US, but in many countries, high-net-worth individuals require privacy because they are concerned about the political risk in their domestic countries. They want to be able to protect against having their assets seized," says Daniel Senn, head of audit financial services at KPMG in Switzerland.