ZURICH (Reuters) - An indictment of Zuercher Kantonalbank by U.S. officials in an ongoing tax probe would not mean the state-backed bank’s demise, Chief Executive Martin Scholl said in an interview with Sunday’s edition of Sonntagszeitung.
Scholl told the newspaper that the bank was in sound financial health and its position underpinned by its majority shareholder, the canton of Zurich.
He did not elaborate on the status of ongoing talks with U.S. justice and tax officials, who are investigating ZKB and nearly a dozen other banks including Credit Suisse CSGN.VX on suspicion of helping U.S. citizens avoid taxes.
“It’s about solving the tax dispute, and cooperation with U.S. officials is the most promising way to do so,” Scholl said.
U.S. prosecutors indicted Switzerland’s oldest private bank Wegelin in February as part of the investigation and other banks fear they could suffer the same fate if Switzerland does not strike a deal soon in negotiations between the two countries.
Last week, Swiss finance minister Eveline Widmer-Schlumpf met U.S. Treasury Secretary Timothy Geithner and Attorney General Eric Holder in Washington to discuss the dispute.
A global crackdown on tax evasion by cash-strapped governments in recent years has chipped away Switzerland’s tradition of banking secrecy, which helped it build up a $2 trillion offshore wealth management industry.
Switzerland wants the investigations dropped, in exchange for payment of fines and the transfer of names of thousands of U.S. bank clients. It also wants a deal to shield the remainder of its 300 or so banks from U.S. prosecution.
Reporting By Katharina Bart; Editing by Sophie Walker