Problem

Abuse of banking secrecy

Other Names:
Unscrupulous banking procedures
Unregulated secret banking
Covert bank accounts
False-name bank accounts
Numbered accounts
Nature:
Banking secrecy is proverbial, especially in Switzerland, and has been the model for more recent off-shore banking services seeking depositors internationally. However, secret bank accounts can facilitate tax avoidance, tax fraud, the financing of organized crime and international terrorism, and embezzlements by reigning monarchs or despots of their governments funds.
Incidence:
Legends of secret fortunes in Swiss banks are connected with the SS and Adolf Hitler, with Shahs and Sheiks, with the Mafia, with the CIA, and with the Vatican, to name a few.
Claim:
The only real moral justification for banking secrecy is that it protects innocent victims from tyrannical and confiscatory governments (as in the case of the Nazi regime). However when the banks in question (as was the case in Switzerland) deliberately use accounting procedures to avoid repayment of funds to Holocaust survivors and their heirs, whilst struggling to protect the assets of those who profit from exploitation and dictatorship, banking secrecy becomes totally questionable.
Problem Type:
F: Fuzzy exceptional problems
Date of last update
12.03.1999 – 00:00 CET