For fans of espionage novels and film thrillers, the term "Swiss bank account" conjures up thoughts of vast fortunes stashed away in secret accounts by spies, criminals and dictators. That popular conception, although overly dramatic and not necessarily accurate, stems from Swiss banks' reputation as safe, relatively discreet places to put money.
Switzerland's financial services sector has traditionally been conservative, resisting risky strategies and earning a reputation for sound management that makes Swiss banks attractive to international depositors. SW Consulting SA, which provides computer services to the banking industry, also says that because financial services represent such an important part of the Swiss economy, the government is quick to deal with problems that could threaten banks' stability. As the CIA notes in its "World Factbook," when the country's biggest banks were hit hard by the worldwide recession in 2008-09, the government rushed in. Finally, Switzerland's long history of political neutrality also lends an air of stability and security. During World War II, the country was an island in the middle of Nazi-occupied Europe, a "safe" place where people on all sides of the conflict could store their assets.
Swiss banking regulations are among the strictest in the world when it comes to disclosure of account information. In Switzerland, it is a crime -- not just a civil offense -- to violate banking confidentiality laws, and all bank employees must sign secrecy agreements. Both institutions and individuals can be prosecuted for violating these laws, and people can be, and have been, sent to prison. That doesn't mean law enforcement can't gain access to account information; it can, but any request must meet very specific criteria. Blanket requests for information -- "fishing expeditions," as SW Consulting calls them -- are not permitted.
The strong privacy controls have led to a common misconception that Swiss accounts are "secret" or even "anonymous." In fact, they are neither. By law, banks must know and verify the identity of every account holder. Even if you open a high-security "numbered" account, in which all transactions are conducted using only an account number, rather than a name, the bank's officers will still need to know who you are. Another erroneous belief is that Swiss law protects bank deposits without exceptions, even if they are criminal proceeds. In fact, Swiss bank accounts can be examined for criminal activity, and seized if any is found, just like in other countries.
Swiss banks will honor a foreign government's request for information if that government can identify a specific account and show evidence that the account contains money from an activity that would constitute a crime in both countries. This once provided a major loophole for crooks, because Swiss law didn't criminalize many financial activities that other countries had outlawed. Since the 1980s, Switzerland has been moving its financial legislation in line with the laws of other Western countries, gradually closing the loophole. This applies only to criminal cases, however, not civil matters. For example, if a couple is involved in a divorce battle, and one spouse suspects the other has hidden assets in a Swiss account, the bank is under no obligation to provide information because no crime has been alleged.
According to Micheloud & Cie, a brokerage that handles Swiss accounts on behalf of overseas depositors, anyone can open a Swiss account. But you can't use it like an American checking account. Banks expect you will use the account only for savings and investments -- you put money in and you leave it there. They require minimum balances at all times; 1 million Swiss francs is a common minimum.