Raiffeisen Group

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The first private banks were established in St. Gallen in the mid of 1700s and in Geneva in the late 1700s Most of the banks are still in the hands of original owner families such as Hottinger and Mirabaud. Some private banks in Switzerland are owned by corporations. Cantonal banks Many semi government organizations provide banking services which are known as Cantonal banks. They are backed by the Swiss government and operate in the twenty six cantons of the country. The Zurich Cantonal Bank provides the largest and diverse banking services among the cantonal banks.

Regional Banks and Saving Banks Regional and savings banks only operate in specific regions. One advantage is customer proximity; they are aware with the local status and with local business cycles Raiffeisen Group is a large corporation which operates a number of banks which are called Raiffeisen banks. These banks provide financial assistance and advice to the Raiffeisen Group in terms of policy and risk management. They help to facilitate the business activities of local banks as they have established themselves as one of the largest bank groups in Switzerland.

Most of these banks offer retail services to an estimated three million Swiss citizens. Foreign banks and Other Banks Foreign banks have fifty percent of foreigners as stakeholders while the rest are Swiss citizens. They analyze and check the foreign assets of banks. They deal in stock market, commercial banking and consumer banking (Vogler, 2001). Foreign controlled banks also attempt to facilitate and increase their profits by operating under the laws of Switzerland. Development of Banking in Switzerland

In 1977, The Swiss banks and their professional organization, the Swiss Banker’s Associate developed binding rules of good conduct in the field of bank management and signed the Observance of Care by the Banks in Accepting Funds and on the Practice of Banking Secrecy. The agreement had reached the Swiss Central bank, which requires the banks to determine the identity of their clients on a methodical basis. Further, the banks came to an agreement not to actively aid in the transfer of capital from foreign countries whose law confined the investment of funds abroad.

The agreement was extended in October 1982 for an extra five years, with more stern policies. The revised agreement forbade the banks from maintaining accounts of clients and companies known by the bank to use their accounts proficiently for the intention of aiding capital flight or tax evasion. According to the laws of Switzerland, banks are sworn to maintain the secrecy of clients. These are defended on the basis of respecting the right of privacy of individuals.

It is considered a duty of the liberal constitution of Switzerland that secrecy must be protected of the individual. However authorized individuals are connected to bank accounts which can allow a judge to provide permission to law enforcement agencies to investigate any criminal conduct. Switzerland’s constitution has separate definitions of tax evasion and tax fraud. If any person does not provide details of his or her assets than this can be termed as tax evasion (Maynard, 2005). However tax evasion is not considered a criminal offense under Swiss law.

It is assumed that the unsuccessful statement of individual’s possessions is not adequate proof for criminal intentions, as the charge of unintentional failure is too elevated. Tax fraud is considered a serious crime which can bring arrest or investigation of individuals under the Swiss Penal Code. Any fraudulent or fake tax documents are evidence of the intent or motivation to perpetrate tax fraud in Switzerland. International organizations like the United Nations and European Union have pressurized the Swiss government to modify their banking laws.

Some European Union nationals invest their money in Swiss banks to avoid taxes in their home countries. The EU has protested this to the Swiss government (Delahunty, 2006). Although, the banks in Switzerland are responsible for protecting their client’s privacy, however disclosures are mandatory in actions that involve inheritance, bankruptcy, debt collection, criminal cases and violating foreign exchange laws. Switzerland is the party to many conventions for providing legal help to other countries. Swiss authorities help foreign countries under the criminal conditions which have been provided by the treaties.

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