In a August 25 press release Switzerland’s oldest private bank announces that it will withdraw from the US capital market. The bank cites the planned tighening of the QI-regime and the extension of succesion taxes as reasons. In the view of Bank Wegelin this will pose an insurmountable problem for banks worldwide. In the bank’s monthly Investment commentary (see below) Konrad Hummeler, the bank’s president does not hold back with critizism of the US government accusing it of commiting grave errors and not knowing its own Achilles heel.
Mr. Hummelers main critizism seems to be the legal risk associated with how the US taxes estates in succession which may lead to a bank becoming a prolonged arm of the IRS as it would have to know everything not only about its US customers but also about its other customers world wide as they could become subject to US tax law for their full wealth even if they have no connection to the US other than say inheriting US equities or certain securities.
In addition the bank reccomends that customers sell all US titles saying that the USA is dramatically overestimating its attractivity as a financial market.
I wonder whether this means that Bank Wegelin will no longer provide services for the State Street Funds which it represents (exclusively?) in Switzerland.
Read the Investment commentary in full at wegelin.ch or below :