As southern Europe looks like an increasingly scary place to keep your money, southern Europeans (particularly Greeks) are looking to get their money into safe havens abroad, such as Switzerland. But if this story is right, the European Commission is negotiating a deal with Switzerland in which Swiss banks would repatriate (that is, confiscate and turn over) funds they hold for Greek citizens.
Obviously this would be a horrible development for Europe (or, more precisely, for Europeans who want to hold assets that won’t be destroyed or stolen by their government), but it’s also astonishingly stupid for the Swiss banks: What is the primary selling point for Swiss banks? Your money is safe there. If your money is no longer safe in a Swiss bank, what purpose do they serve?
They don’t even need to conclude a deal, the mere fact (if it is a fact) that they are negotiating this is enough to destroy confidence in Swiss banks. Who would risk keeping their money there?
On the other hand, it’s great news for the Caymans, et al.
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