UBS AG and the Swiss and US governments have inched a step closer to resolving the legal tangle over the tax evasion by US clients. The parties involved have agreed to resolve the issue in an out of the court settlement – reported BBC news.
Both the governments, employing a bilateral tax treaty, agreed that the UBS clients could go through the Swiss legal system but US prosecutors could still pursue criminal charges if the Swiss court procedure drags on indefinitely – reported Wall Street Jounral.
Even though the settlement brings an end to the long-running ignonimous chapter for the Swiss bank, it is still reeling under a reputational blow. Huge amounts of money from its private banking division have found their way out since the dispute began, and the bank is anticipating further outflows, reported the newspaper.
In an interview to the newspaper, before the settlement was announced, Oswald Grübel, CEO of UBS, said: UBS has largely written off the US market and is now seeking more business in Asian and Middle Eastern cities to replace the loss. These are areas where the reputational issue doesn’t weigh at all. They are more concerned about the financial stability of the bank, which has improved.
