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Credit Suisse sanguine after US tax evasion guilty plea

Credit Suisse sanguine after US tax evasion guilty plea
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One day after Credit Suisse pleaded guilty to helping Americans evade taxes and agreed to pay $2.5 (1.8 billion euro) fine, the bank said it has seen no material impact on its business because of the affair.

And importantly Chief Executive Brady Dougan confirmed the bank will not hand over any details of its US clients to the authorities as part of the settlement deal.

In Washington they considered this a coup. Attorney General Eric Holder said: “Credit Suisse has agreed to plead guilty to criminal charges related to this pervasive illegal activity. This is the largest bank to plead guilty in 20 years.”

He added: “This case shows that no financial institution, no matter its size or global reach is above the law.”

Credit Suisse pleaded guilty not only because of its involvement in tax evasion, but also because of its poor cooperation in the investigation, prosecutors said. It did not begin an internal probe until early 2011, and did not preserve some evidence of the wrongdoing, documents showed.

The rare guilty plea raises questions about what will happen with a dozen or so other Swiss banks also under criminal investigation in the US.

Swiss finance minister Eveline Widmer-Schlumpf said she expected their settlement talks to be resolved in coming months, but added there were no metrics to determine potential fines or other measures for them.

The penalties for Credit Suisse could have been far worse; the New York state bank regulator decided not to revoke its licence to operate in the state, which would have been a major blow to its ability to do business in the US.

As it is the regulator plans to place a monitor of its choosing inside Credit Suisse.

The US Federal Reserve said it was still investigating whether other individuals should be subject to actions such as fines or bans. It did not name the individuals.

Credit Suisse’s shares rose on Tuesday on relief that the matter has finally been resolved.

with Reuters

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