Swiss banking independence and secrecy dates back to the 1700s, and has generally been accepted by all nations. Many savers from the world over have found in this country an attractive means of safeguarding wealth from oft confiscatory taxing authorities. For the really rich, making money is not so much an issue as is keeping a respectable portion of what one has already accumulated.

Presently, around one-third of global offshore funds reside in Switzerland. We currently manage portfolios amounting to around US$ six trillions. Our clients include the rich, famous, infamous, well-connected, and the most powerful individuals ever scratching the surface of this planet.

While we believe that the right to privacy is a fundamental right for free peoples, we do have numerous ethical restrictions upon folks with whom we will do business. For example, we will not accept funds from Americans who are not able to certify that they are in full compliance with IRS regulations. Also, “lifting orders” are frequently granted to foreign taxation authorities to facilitate resolution of criminal investigations. It should be noted that tax evasion is not considered a crime in Switzerland, although tax fraud is not tolerated and is severely punished.

Our “Banking Law of 1934, Article 47(b)” makes violation of our banking secrecy guidlines a criminal offence. Any person operating in the banking sector who violates the dictates of secrecy is sure to do some hard time in some quite unpleasant gaol.

At the London G20 Summit, in April, blacklisting guidelines were promulgated for international tax havens. Tier I countries, those substantially in compliance with standards included the UK and US. Tier III countries, those agreeing with the standards but not yet fully implementing them included Switzerland and Austria. Switzerland has aleays attempted to be a good, but neutral, world citizen.

The US has long been seeking to dominate other nations by means of a Pax Americana. The “one worlders” movement spearheaded by the US and UK are naked attempts to harmonise all commercial and tax laws to the US standard, to the advantage of their resident financial elites (not necessarily to the advantage of their respective common folk). The US no longer respects the sovereignty of any other nation and is increasingly acting like some third world, rogue state.

Earlier this year, UBS was convicted, rightfully or wrongfully, of defrauding US tax law by concealing US$ billions of American investors’ funds in secret, offshore accounts. UBS paid $780 million in fines for this infraction.

Now the IRS are demanding that UBS reveal transactions for 52,000 American customers under suspicion of tax evasion. Such a disclosure would constitute an egregious violation of Swiss sovereignty and banking law. Last Wednesday, the Swiss government advised that it would block any movement of UBS to surrender the details in question. Once formally broken, these secrecy laws would not be able to ever function again.

Alan S. Gold, of the Federal District Court in Miami, has ordered prosecutors and the IRS to determine with the Obama administration and the State Department, by today, the full prosecutorial intent of this case. Will the case against UBS be moderated, UBS’ assets seized, or will UBS be forced into heavily supervised receivership? Monday will be an interesting day.

In the personal view of a former private banker who has previously dealt with more than a few of the world’s truly wealthy, and somewhat understands the workings of “the system”, should the IRS prevail in their attempts to vacate international banking secrecy laws: Swiss banking will be kaput; Switzerland, as a nation, will be kaput; many of the world’s most powerful citizens will be under indictment; major governments will fall; global financial instability will increase; and the world’s security markets will have a collapse, the magnitude of which will be equivalent to the fall of the Roman Empire and the ushering in of a New Dark Age.

Do you have a feeling for what the Swiss public are thinking right now concerning the attack on their bank-secrecy laws ? .. and in effect , an attack on their sovereignty ( IMO ) ?

Somewhat Germany. My ancestors emigrated from Bavaria to Switzerland (Schweizerische Eidgenossenschaft) around 900 years ago and their descendants have resided there ever since.

I have lived in Switzerland, the UK (Oxford, and later Kensington [Holland Park] – and will be visiting in Sept/Oct for an alumni function), the USA, and Brazil.

My main language is Swiss German. I speak pretty good French, and passable Italian and English. I fear that my foreign language attempts are often garbled – for which I apologise.

And regards.

The disclosure is one of the first attempts to quantify the impact of so-called “high frequency” trading firms that have quietly grabbed a huge slice of trading in the world’s equity markets.

Some of the trading firms – such as Getco, Peak6, RGM Advisers and Hudson Bay Trading – are far from household names in the markets. Many are based in Chicago and grew out of the city’s options trading pits.

However, they appear to have built up such a significant presence in the markets that they look set to eclipse familiar Wall Street names in their collective influence. Such firms have grown especially quickly as they filled a gap in the markets left by hedge funds.

They typically employ trading strategies that are based not on company earnings prospects and other fundamentals, but on arbitraging minute differences in share prices and trading speeds – known as latency – between exchanges and other trading venues.

Robert Iati, partner at Tabb, said: “They are, as a rule, secretive, stealthy, smart, and relatively unknown.

“The incredible capabilities offered by technology have given meteoric rise to a relatively few high frequency proprietary trading firms that now wield far greater influence on the markets today than most people recognize,” he added.

Tabb estimated that such firms, which include the new breed also known as “electronic liquidity providers”, represent about 2 per cent of the 20,000 or so trading firms operating in the US markets. But they accounted for 73 per cent of all US equity trading volume.

Trading venues have altered their fees structures to attract such firms, which often look for platforms to offer monetary incentives to encourage firms to post liquidity with them in so-called “maker-taker” fee models. The London Stock Exchange this month abandoned a maker-taker fee model introduced only in September last year, a move that its smaller rivals such as BATS Europe are likely to welcome as it could drive more high-frequency traders to them.

The firms included proprietary trading desks for a small number of major investment banks, less than 100 of the most sophisticated hedge funds and hundreds of “the most secretive prop shops, all of which operate with one thing in mind: capture profit opportunities by being smarter and faster than the closest competition”, Tabb said.

Firms engaged in high frequency trading (HFT) use complex computer algorithms to drive their trading strategies, and guard them jealously. The value of such algorithms was exposed this week when US federal prosecutors charged Sergey Aleynikov, a former Goldman Sachs computer programmer, with stealing computer code from the bank’s HFT business.

FROM: ‘Secretive’ firms dominate US share trading by Jeremy Grant in London, July 10 2009 (The Financial Times) http://tinyurl.com/ndh8vl