Page last updated at 16:28 GMT, Thursday, 13 November 2008

UBS boss charged over tax evasion

UBS office in New York
UBS was already trying to improve its reputation

A senior director of Swiss bank UBS has been charged by US authorities with helping US citizens commit tax evasion totalling $20bn (13.5bn).

In a move that once more raises questions over secretive Swiss banking practices, Raoul Weil is accused of helping 20,000 US investors evade tax.

He was said to have aided the tax evasion between 2002 and 2007, helping UBS gain $200m in revenues.

A lawyer for Mr Weil said the charges were "totally unjustified".

'Negative headlines'

Analysts said the charges against Mr Weil would not affect the bank's long term future, but that it was not good for UBS's already damaged reputation.

"The direct implication on earnings is not big," said Dirk Becker, an analyst with Kepler Equities.

"We are worried about the ongoing negative headlines and possible actions of other countries."

UBS is continuing efforts to turn around its fortunes after it gained a 6bn Swiss franc ($5.3bn; 3.1bn) bail-out from the Swiss government last month.

The firm needed the money after it posted multi-billion losses earlier this year as a result of its exposure to the toxic US bad mortgage debt that sparked the continuing credit crunch.

Switzerland has long been criticised for its secretive banking system, and the way in which overseas investors can very discretely obtain accounts.

The European Commission said on Thursday that it intended to toughen up existing arrangements with Switzerland and other such financial centres to prevent investors from avoiding taxes.

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