Credit Suisse's chief executive, Brady Dougan, was yesterday forced to defend the bank from accusations that it generated "ill-gotten profits" by helping American citizens to evade tax.
Giving evidence to a Congressional committee in Washington, Mr Dougan admitted that some Credit Suisse employees had been guilty of "unacceptable" behaviour and expressed regret. He added that the wrongdoers were a small minority of employees and that senior management had not known what was taking place.
The US Senate's Permanent Subcommittee on Investigations reported this week that Credit Suisse bankers went to inordinate lengths to help 22,000 customers to avoid US tax.This included making false claims in US visa applications and shredding documents. It said Credit Suisse bankers took 150 trips, often on tourist visas, to the US between 2002 and 2008 in order to assist tax evasion. One Credit Suisse banker is alleged to have passed account statements to a client hidden inside a copy of Sports Illustrated.
The Arizona senator and top-ranking Republican on the committee, John McCain, said Credit Suisse needed to answer for decades of "ill-gotten profits".
Despite admitting wrongdoing, Swiss law prevents Credit Suisse handing over the names of US citizens whom it helped to avoid tax.
Carl Levin, the committee's chairman, said that refusal was unacceptable in the light of the fact that Credit Suisse had actively facilitated tax evasion on American soil. "The jig's up," he said. "We believe that if you're going to operate in a country you have to operate according to the laws of that country."
Mr Dougan said he had lobbied the Swiss parliament to change the law forbidding disclosure in order to allow his bank to provide avoiders' names to the US tax authorities. He said that the suspect accounts, which at their peak accounted for assets of $10bn to $12bn, accounted for less than 1 per cent of the bank's profits.