Swiss banks' pay bitterly for dark past
On August 12, 1998, the Union of Swiss Banks and Crédit Suisse agreed to pay 1.25 billion USD to American Jewish organizations bringing to a close one of the most serious political crises that Switzerland has known since WWII. Nine years later, what assessment can be made of a controversy that aroused passions, provoked a political identity crisis in the heart of Swiss society, strained US-Swiss relations and forced Swiss banks to lift bank confidentiality for the years of 1939-1945?
The root of the issue is simple: a number of Jews murdered by the Nazis had bank accounts in Switzerland. After 1945, the Swiss banks made no effort - and sometimes even blocked efforts - to return this money to the rightful account holders. But with the end of the Cold War, Switzerland lost its strategic importance for the US. American Jewish organizations increased their pressure on Swiss banks, threatening to boycott them, while victims filed a class action lawsuit. Threatened with doors being closed to the vital American market, the Swiss banks signed the general accord before the American judge Edward Korman. The sum was negotiated bitterly and secretly. To this day there are two opposing theories. For the Swiss banks, this sum is largely overvalued, having nothing to do with the reality of the funds in escheat. They say, basically, they are paying for having lost the battle with the Jewish organizations. The latter, on the contrary, assert that these banks destroyed the records of more than 2.5 million accounts opened between 1939 and 1945 (out of a total of 6.8 million) and thus concealed the disappearance of the assets.
Want to read more?
If you subscribe to a free membership, you can read this article and explore our full archive, dating back to 1997.