US Flexes Financial Muscle, Closes Down Swiss Bank

The closure of Swiss bank Wegelin, formerly the oldest bank in Switzerland, as a result of a criminal case in the United States, is frightening the banking community like nothing since LIBOR began to unfold. Wegelin admitted that it had wrongly aided Americans in tax evasion. More importantly, it implicated the entire Swiss banking community, noting a climate where assisting tax evasion was common practice. This admission raises the fundamental question that has been dogging the banking community since the financial markets tanked in the late 2000s: is the problem a rogue individual within the company or is the culture of the banking community? The public seems to be leaning toward the answer being that the culture is the problem and most rogue individuals are a result of a culture that encourages or accepts such behavior. This answer is not good news for banks and could perhaps spell further trouble ahead than the LIBOR scandal still in its denouement and the Swiss tax evasion scandal which continues to unfold.