Swiss To Vote On Gold Repatriation - "Gold Is The Only Valuable Asset On The SNB"s Balance Sheet"

A few weeks ago, we wrote of the Swiss People’s Party’s efforts to gain enough signatures to force the Swiss National Bank (SNB), who ‘supposedly’ guarantees the price stability in Switzerland, to stop selling its gold reserves. This last week, as the FT reports, they reached the required 100,000 signature mark and on Thursday the federal chancellery confirmed Switzerland is to hold a referendum that would ban the central bank from selling its gold reserves, force it to keep at least 20% of its assets in the metal, and  repatriate gold reserves held abroad and keep them at home. Following Cyprus’ forced sales and discussions of the net wealth in other European peripheral nations, proponents of the Swiss measure flatly reject the idea of sales, arguing that disposals of gold reserves at low prices between 2001 and 2006, as well as more recently, have cost Switzerland billions of Swiss francs. The “Save Our Swiss Franc” initiative proclaims, “today gold is almost the only really valuable asset left on the SNB’s balance sheet.” The SNB, however, is concerned at, “the monetary policy implications of the demands in the initiative.” A date for the referendum has not yet been set – but the FT notes that previous ‘referenda’ have taken up to several years from acceptance to actual vote.

Via The FT,

Switzerland is to hold a referendum on a popular measure that would ban the central bank from selling its gold reserves and force it to keep at least 20 per cent of its assets in the metal.

 

Under the terms of “Save our Swiss Gold”, which is led by members of the ultra-conservative Swiss People’s party, the Swiss National Bank would have to repatriate gold reserves held abroad and keep them at home.

 

…

 

Governments in the eurozone’s beleaguered southern periphery tend to hold a large part of their total foreign reserves in gold – the Italian central bank holds 2,451 tonnes, more than 70 per cent of its total reserves, while Portugal’s holding of 383 tonnes accounts for 90 per cent.

 

…

 

They insist that the SNB’s gold reserves, which stood at SFr49.5bn at the end of February, accounting for about 10 per cent of its balance sheet, are the best store of value available to the central bank.

 

…”Today gold is almost the only really valuable asset left on the SNB’s balance sheet,”…

 

…

 

“We have considerable concerns with regard to the monetary policy implications of the demands in the initiative,” the [SNB] said, adding that it would provide a fuller response “in due course”.

 

A date for the referendum has not yet been set. However, it is not uncommon for the period between an initiative being accepted for referendum and a vote being held to extend to several years.

Zero Hedge

Swiss To Vote On Gold Repatriation - "Gold Is The Only Valuable Asset On The SNB"s Balance Sheet"

Switzerland to Hold Referendum Banning its Central Bank from Selling Gold Reserves

In Swiss law, private citizens can put forth any initiative that can gather 100,000 signatures. A campaign by the Swiss People’s Party to “Save our Swiss Gold” gathered 106,052 signatures so a vote will be coming up.

Switzerland is to hold a referendum on a popular measure that would ban the central bank from selling its gold reserves and force it to keep at least 20 per cent of its assets in the metal.

Under the terms of “Save our Swiss Gold”, which is led by members of the ultra-conservative Swiss People’s party, the Swiss National Bank would have to repatriate gold reserves held abroad and keep them at home.

Governments in the eurozone’s beleaguered southern periphery tend to hold a large part of their total foreign reserves in gold – the Italian central bank holds 2,451 tonnes, more than 70 per cent of its total reserves, while Portugal’s holding of 383 tonnes accounts for 90 per cent.

However, proponents of the Swiss measure flatly reject the idea of sales, arguing that disposals of gold reserves at low prices between 2001 and 2006, as well as more recently, have cost Switzerland billions of Swiss francs.

They insist that the SNB’s gold reserves, which stood at SFr49.5bn at the end of February, accounting for about 10 per cent of its balance sheet, are the best store of value available to the central bank.

The Swiss National Bank is of course against the idea and will provide a response in “due course”. I can translate their response in advance: “We reserve the right to trash the Swiss Franc at will, if and when we want to.”

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com 

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Switzerland to Hold Referendum Banning its Central Bank from Selling Gold Reserves

Authorities charge Swiss banker, attorney in tax probe

By Joseph Ax

NEW YORK | Tue Apr 16, 2013 9:26pm EDT

NEW YORK (Reuters) – Authorities on Tuesday charged a Swiss banker and a Swiss attorney with helping American clients hide millions of dollars in offshore accounts to evade paying taxes.

The case is the latest in a string of prosecutions from the Justice Department aimed at curtailing offshore tax evasion services sold by Swiss and Swiss-style banks.

Stefan Buck and Edgar Paltzer were each charged with one count of conspiracy, an indictment filed in Manhattan federal court showed. It did not name the defendants’ employers.

Buck is the head of private banking and a member of the executive board at “Swiss Bank No. 1,” while Paltzer is a partner at a “Swiss Law Firm” and was admitted to the New York bar in 1988, according to the indictment.

Zurich-based Bank Frey lists Stefan Buck as its head of private banking and a member of its executive board on its website.

The Swiss law firm Niederer Kraft & Frey lists Edgar Paltzer as a partner on its website, and New York state records show he was admitted to the New York bar in 1988.

Attempts to reach Bank Frey and Niederer Kraft & Frey for comment were unsuccessful outside of regular Swiss business hours.

In March 2009, Swiss bank UBS AG (UBSN.VX) agreed to pay $ 780 million to settle charges brought by the Justice Department. The oldest Swiss bank, Wegelin & Co, pleaded guilty in January to helping wealthy Americans evade taxes and was sentenced to pay nearly $ 58 million in penalties.

According to the Manhattan U.S. Attorney’s office, which brought the charges, Buck’s bank saw an increase of 300 percent in U.S. taxpayers as clients between the time of UBS’s settlement and Wegelin’s indictment in February 2012.

Around $ 938 million, or 44 percent, of the bank’s $ 2.1 billion in managed assets as of September 2012 was held by U.S. taxpayers, prosecutors said.

Buck and Paltzer opened and managed undeclared accounts for U.S. clients who had been informed by other Swiss banks that they had to close their accounts there.

Both men reside in Switzerland, and neither has been arrested, prosecutors said.

Paltzer, a dual U.S.-Swiss citizen, is admitted to practice law in New York, authorities said.

The defendants each face fines and a maximum prison sentence of five years.

The case is U.S.A. v Paltzer and Buck, U.S. District Court for the Southern District of New York, No. 13-282.

(Reporting by Joseph Ax; Editing by Ryan Woo)

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Reuters: Business News

Authorities charge Swiss banker, attorney in tax probe

Ex-French minister says "lied to self" over Swiss bank account

Tue Apr 16, 2013 2:59pm EDT

* Cahuzac resigned from post in charge of fighting tax fraud

* Says he lied to Hollande, Moscovici about foreign accounts

* Affair has shaken Socialist government

By Nicholas Vinocur

PARIS, April 16 (Reuters) – A former French minister who quit after admitting he had a secret foreign bank account appealed for forgiveness on Tuesday, saying on TV he had made a “crazy error”, lied to himself for years and was unlikely to return to politics.

Jerome Cahuzac resigned last month after coming under investigation for tax fraud, admitting, despite weeks of ardent denials, that he had lied to colleagues about having a Swiss bank account which held some 600,000 euros ($ 787,800).

In his first TV appearance since resigning as minister in charge of cracking down on tax fraud, Cahuzac repeatedly asked colleagues and friends for forgiveness and said he had hidden his “dark side” to all around him – even to himself.

“I lied to myself for years,” Cahuzac told news channel BFM in a slow, steady voice. “I had a dark side, and now that dark side is plain for all to see.”

The minister added he was resigning as a member of parliament and would let voters in his home constituency in the southwest decide whether he should return to politics.

Cahuzac’s fall shook President Francois Hollande who responded by publishing the assets owned by all ministers in his Socialist government, a bid to demonstrate transparency which risked further publicising the private wealth of his team.

Hollande and his finance minister, Pierre Moscovici, have repeatedly denied having any previous knowledge, and Cahuzac said that he had lied to both about his account.

Asked if Hollande knew about it, Cahuzac said: “I do not know how much he knew about this affair.”

A gastric surgeon and hair implant specialist by trade who entered politics late in life, Cahuzac was the public face of France’s budget-cutting drive with a reputation for a ruthless approach to cost reduction.

News that he had lied unleashed a torrent of condemnation, with one minister known to be a friend saying he could no longer socialise with Cahuzac. French media reported that he had to sleep in a car after being turned away from a friend’s house.

Cahuzac said the money he kept abroad came from work as a doctor, without providing details, and denied rumours he may have accounts in Singapore containing up to 15 million euros.

“I made a crazy mistake, a crazy mistake twenty years ago,” he said of his decision to place money in Switzerland. “I hid it so that I didn’t even know it was there, I was lying to myself.”

Cahuzac repeated that he regretted his mistake deeply, understood the anger against him, and was afraid of going to prison if found guilty of tax fraud. A judge is investigating and Cahuzac has not been detained.

The 30-minute confessional interview was a part of a new trend in France, where highly trained politicians rarely reveal their feelings. Former IMF chief Dominique Strauss-Kahn gave a similar interview, admitting “grave faults” after being accused of attempted rape. ($ 1 = 0.7616 euros) (Editing by Robin Pomeroy)

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Reuters: Financial Services and Real Estate

Ex-French minister says "lied to self" over Swiss bank account

Swiss say U.S. not in touch over Heinz insider trading case

Traders work at the post that trades H.J. Heinz Co. on the floor of the New York Stock Exchange, February 14, 2013.

Credit: Reuters/Brendan McDermid

ZURICH | Mon Feb 18, 2013 6:59pm EST

ZURICH (Reuters) – Swiss authorities said on Monday they have not yet been asked to help a U.S. investigation into alleged insider trading in call options of H.J. Heinz Co (HNZ.N) the day before the company announced it would be sold, even though a Zurich account is at the heart of the matter.

U.S. securities regulators filed suit on Friday against as-yet-unidentified traders in Heinz options alleging they traded on inside information before the company made public the deal to be bought for $ 23 billion by an investor group made up of Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) and Brazil’s 3G Capital Partners.

The U.S. Securities and Exchange Commission said in a statement on Friday it had obtained “an emergency court order to freeze assets in a Zurich, Switzerland-based trading account that was used to reap more than $ 1.7 million from trading in advance of yesterday’s public announcement about the acquisition of H.J. Heinz Company.”

The order from the U.S. District Court for the Southern District of New York freezes the traders’ assets and prohibits them from destroying any evidence, the SEC statement said.

SEC spokesman John Nester said on Monday that the assets concerned had been frozen in the United States, not Switzerland, though the “beneficial owners” were those allegedly behind the Swiss account. He did not respond immediately when asked if the U.S. authorities were in contact with their Swiss counterparts.

With the assets frozen, the SEC would have had no immediate need for Swiss assistance in the case, although it eventually may need help to identify the account holders.

Rainer Borer, a spokesman for the Swiss financial markets watchdog known as FINMA, said a U.S. court cannot by itself freeze assets in an account of a bank operating in Switzerland.

“For that, it has to ask for legal or administrative assistance,” he told Reuters. “Up to now, FINMA has not received a U.S. request for administrative assistance in the mentioned case of potential insider trading.”

Justice ministry spokesman Folco Galli said the ministry had not received an official request for legal assistance either.

“Either a request for administrative or legal assistance would be necessary because a U.S. court cannot enforce a coercive measure in Switzerland,” he said.

U.S. bank Goldman Sachs (GS.N) has said it is co-operating with the SEC probe. The SEC suit filed Friday refers to the account in Switzerland as the “GS Account.

Heinz had no comment, Michael Mullen, a company spokesman, said by email. Berkshire Hathaway and 3G Capital likewise declined to comment, said Gemma Hart, a spokeswoman for the investor group.

(Reporting by Silke Koltrowitz; Additional reporting by Martin de Sa’Pinto in Zurich and Jim Wolf in Washington; Editing by Marguerita Choy)

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Reuters: Business News

Swiss say U.S. not in touch over Heinz insider trading case