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Russians have hidden up to $213 billion in Swiss banks

ZURICH — Switzerland’s secret banks hold up to $213 billion in Russian assets, the country’s financial industry association estimates, as sanctions on Russia offer a rare glimpse into Swiss vaults.

The Swiss Bankers Association (SBA) estimates that banks hold between 150 and 200 billion Swiss francs ($213 billion) in Russian client funds in offshore accounts.

This suggests that the scale of wealthy Russians’ dealings with banks in Switzerland, the world’s largest center for offshore wealth, far outweighs the accounting risks that several of its financial firms have begun to detail.

The SBA revelation is rare for Switzerland, which has denied many previous transparency requests, and comes as it took the unusual step of imposing European Union sanctions on Russian cash following Moscow’s invasion of Ukraine last month.

There is a growing public debate in Switzerland over their role, with Social Democrat co-president Mattea Meyer calling on Switzerland to crack down on cash from Russians close to President Vladimir Putin and his government.

An illuminated sign hangs in front of a UBS.
UBS said a $634 million direct exposure had been reduced since the year-end.
Bloomberg via Getty Images

“Part of it belongs to oligarchs loyal to the Kremlin. The money and their activities… help fund the war,” she said, adding that Switzerland “must do everything to shut off the money taps.”

The SBA estimate, which dwarfs early evidence of credit exposure to Russia, underscores the magnitude of the task of imposing sanctions, such as a cash freeze.

Switzerland’s economy ministry said it had no meaningful estimates on frozen Russian assets as it collated reports from banks facing a growing Swiss sanctions list. Despite its Russian balance sheet estimate, the SBA emphasized that this is small compared to total wealth in Switzerland, which is viewed as a safe haven for their money by generations of wealthy individuals from around the world.

“Assets held for Russian clients are likely to account for a low single-digit percentage of total cross-border assets deposited with Swiss banks,” a statement emailed to Reuters on Wednesday said, referring to the held Money for customers residing abroad.

Russian risk

As Western governments impose a growing list of sanctions in response to the Russian invasion, banks are finding their dealings with Russian customers under scrutiny far beyond loans they extend or dealings by Russian subsidiaries that could result in balance sheet losses .

Analysts have said Swiss banks’ direct exposures to Russian clients appear manageable based on what has been released.

Switzerland’s two largest banks detailed their “limited” exposures to Russia last week, with the largest UBS saying a $634 million direct exposure had been reduced since year-end. Credit Suisse chief executive Thomas Gottstein said on Tuesday that around 4% of the assets that Switzerland’s second-biggest bank manages for wealthy clients are owned by Russians, amounting to tens of billions of dollars.

That’s far more than the net credit exposure of 848 million Swiss francs in the Credit Suisse annual report.

Although the bank didn’t provide an updated balance sheet, it managed CHF827 billion in its wealth management business at the end of 2021, so 4% would equate to around CHF33 billion in assets related to Russian clients.

UBS and Switzerland’s third-largest listed lender, Julius Baer, ​​have declined to detail the assets they hold for Russian clients, but UBS CEO Ralph Hamers indicated sanctions were preoccupying the country’s biggest bank.

Swiss private bank Julius Baer
Analysts have said Swiss banks’ direct exposures to Russian clients appear manageable based on what has been released.
AFP via Getty Images

“New lists come out every night,” he said, adding that UBS not only wants to hedge against current compliance but also against the risk of future penalties.

($1 = 0.9395 Swiss Francs)

https://nypost.com/2022/03/17/russians-have-up-to-213-billion-stashed-in-swiss-banks/ Russians have hidden up to $213 billion in Swiss banks

DUSTIN JONES

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