Tax clampdown to hurt Swiss banks Switzerland's two biggest banks could suffer outflows of more than SFr60bn ($65bn) as a result of accelerating international efforts to clamp down on wealthy individuals using the country's bank secrecy laws to evade taxes. Since August 2011, Germany, Britain and Austria have struck agreements with Switzerland, entitling them to receive one-off penalty charges and a withholding tax on previously undeclared assets held by their citizens in Swiss banks. Meanwhile, the US is investigating 11 Swiss banks on suspicion of helping US citizens dodge taxes, and in February indicted Wegelin, the oldest Swiss private bank, for allegedly helping Americans evade paying taxes on $1.2bn in assets. On Monday, Jürg Zeltner, head of UBS's wealth management division told the Schweizer Bank magazine, that he expected that the resulting changes to the Swiss banking sector would cause UBS's clients to withdraw assets worth "between SFr12bn and SFr30bn," adding that the European offshore business could face outflows for "quite a while yet." David Mathers, chief financial officer of Credit Suisse, told investors in New York last week that "cross-border transformation including new tax treaties could result in SFr25bn to SFr35bn outflows over the next few years." The two banks are among the world's largest wealth managers. At the end of June, UBS's non-US wealth management division had SFr783bn of invested assets, while Credit Suisse's wealth management arm had SFr774bn of assets under management. However, Switzerland's smaller private banks are also being affected by the growing political pressure, and Mr Zeltner predicted that for the SFr2.7tn Swiss offshore banking sector as a whole, the outflows could run into the "hundreds of billions." Another driving factor behind withdrawals over the past two years has been the repeated purchases by German tax investigators of stolen CDs containing client containing information about the Swiss accounts of German tax evaders. While these have prompted some clients of Swiss banks to provide information on previously undeclared assets to German authorities, there has also been speculation that others have begun moving assets to other financial centres. Panagiotis Spiliopoulos, head of research at Bank Vontobel, said he expected the total outflows from Switzerland's banks to be "quite significant" adding that they would mainly come from Italian, German, and to a lesser extent, French clients who still had undeclared wealth in Swiss banks. "There's not much left to come from US clients as most Swiss banks started getting rid of US offshore clients years ago," he said. In 2009, UBS paid $780m to settle criminal charges in the US, while Credit Suisse revealed in November that it had set aside SFr295m to cover part or all of its share of a potential tax settlement.