Switzerland is one of the world’s largest offshore financial service centers.  In fact, it is probably the biggest financial center, holding about 35% of the world’s private assets.  The banking sector of Switzerland has dominated the rest of the world’s banking sectors through the Swiss political and economic stability, emphasis on secrecy, and their laws regulating and protecting deposits worldwide.  Banks in Switzerland have firmly established a strong reputation for efficient and confidential investment portfolio management.  Banks have extensive services which include trust companies, estate planning, brokerage accounts, and gold numismatics.

Swiss laws are strict in protecting the confidentiality of their client’s information, deposits and assets.  Bank employees are required to sign confidentiality contracts as an employment condition.  In fact, a provision in their contract states that their employees would be criminally liable in case of breech of client’s confidentiality.  In fact, Swiss courts consider divulging of information on a bank client by a bank employee as a serious offense.

The banking sector of Switzerland is regulated and controlled by the Federal Banking Commission (FBC), which was created under the Banking Law of 1934.  Banks are required by law to secure a license from the FBC in order to maintain and operate a business.  The law has imposed restrictive conditions for granting a license, with additional conditions imposed on banks with foreigners having the controlling interest.  The FBC applies stringent and excellent capital, equity and liquidity regulations to all Swiss banks under its control.  These rules do not apply to private banks which do not solicit clients publicly.  The banks under the control of FBC are required to submit annual report to the Swiss National Bank and FBC.

Indeed, Switzerland has adopted strict measures in order to protect their clients’ confidentiality and the secrecy of information.  However, desirous of creating an international reputation of being a financial center which is also waging war against money laundering and organized crimes, the government has passed the Money Laundering Law of 1998.  This law represents the country’s response to the increasing and alarming rate of money laundering.  Inadvertently, acceptable circumstances were laid out by this law as a basis for breech of secrecy.