GENEVA - The head of HSBC's private banking operations in Switzerland on Monday criticized tactics used by Germany in its tax evasion row with Liechtenstein, saying they posed serious obstacles for the banking industry.
"I think it's time to leave the industry... when governments buy stolen goods to basically get their way through," said HSBC Private Banking (Suisse) chief executive Peter Braunwalder, who is stepping down in October.
"I see this industry becoming more and more difficult ... the German government is doing things that shock me," he said.
Liechtenstein has been under scrutiny in recent weeks after Germany began investigating 600 of its citizens whose names were allegedly on a client list of a Liechtenstein bank -- containing a total of 1,400 names -- that it then made available to other nations.
The German government last month admitted paying more than four million euros (six million dollars) to an informer for client data from Liechtenstein bank LGT that led to the biggest tax fraud probe ever in Germany.
The United States, Britain, Australia, Italy, France, Sweden, Canada, New Zealand, Greece and Spain have all said they too are hunting for taxpayers hiding their money in the tiny Alpine state.
Braunwalder said it should be up to national governments rather than private banks to track down money deemed to be stashed away from the exchequer.
"If they (the authorities) find that the money is missing, they can ask for assistance and we will help," he said.
But "they want to charge 65 percent tax on their people and ...then they go to Liechtenstein, Luxembourg to ask them to do their job?" he asked rhetorically.
He was speaking at the presentation of HSBC Private Banking (Suisse)'s annual results.
Pretax profit reached 800 million Swiss francs (782 million dollars, 510 million euros), up 43 percent from 2006, while operating income rose 37 percent to 1.8 billion Swiss francs.
Net new money from private banking clients reached 22.7 billion Swiss francs, up about 15 percent from a year earlier, said the bank's chief financial officer Leigh Robertson.
Net inflow from private banking clients in Asia made up about half of the sum, or 10.3 billion Swiss francs.
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03/10/2008 15:14 GMT