Insider trading is related to the financial transactions where a person possessing public information uses it to harvest profits or avoid fatalities at the expense of other securities investors. The U. S. Securities and Exchange have long sought the names of Swiss banking clients to acquire such information and on whose behalf securities were being dealt in the United States of America. The Swiss Bank was prohibited from giving the information as until recently the misuse of inside information was not a criminal crime.
An intervening arrangement was made between the Swiss Bankers Association and a Memorandum of Understanding between the Swiss Confederation and United States were reached. They allow the bank, based on exclusive client authorization to contribute in the procedure, in which a possible insider is verified by the Commission of Swiss lawyers (Johnston, 2006). If the person is found out to be an insider according to definition of the arrangement and if some particular circumstances are present, the Commission will reveal the identity the client and other information related.
Because Switzerland has in recent years enacted many laws to modify its secrecy and confidentiality, countries like Panama and Singapore have been attracting clients who want secrecy and confidentiality. Switzerland faces stiff competition from Singapore which has launched many modifications to its policies and laws to attract private investors. Singaporean banks are now considered to be much better protected and secretive as compared with Swiss banks. Panama is South America’s largest financial center where the chief international banks are located (Hetzer, 2003).
Characteristics of Swiss Banking System When comparing the economic importance and its share in world trade, Switzerland has a large banking and financial sector. The country is one of the leading financial centers after New York, Tokyo and London. Switzerland banking system is also very secure and efficient. Swiss banks function with the maximum equity ratios of all. Swiss banking is appealing to both market analysts and investors (Johnston, 2006). Major Swiss banks continuously get high marks for reliability and security from the main credit rating organizations.
Also large portion of all internationally managed private properties are managed by the Swiss banks. Swiss bankers work to look forward to their client’s requirements and naturally are always one step ahead of their rivals. The success of Swiss banks has been achieved by five solid accomplishments. Switzerland is popular country for several things. For centuries, it has social and political stability. Despite continuous changes in the banking sphere, Swiss bankers adhere to the same fundamental principle. The Swiss approach towards reliability is more than just proper ways of business.
A Swiss banker is not only trustworthy, he or she is also the protector of each and every customer’s specific financial concerns and able to act on their behalf (Johnston, 2006). Swiss banks are obliged by rules and regulations to support their transactions with capital ratios which are greatest in the world. If there is no efficiency in the present system, Switzerland would have not been present. The Swiss bank manager has the knowledge that the achievements comes only when they recognize individual needs of their customers and fulfill them.
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