The move was greeted with anger by representatives of tens of thousands of Jews fighting for compensation for assets that the Swiss failed to return at the end of the Second World War.
Faced with a potential billion-dollar lawsuit, Credit Suisse Group, Swiss Bank Corp and the Union Bank of Switzerland - with total assets of more than $120bn - began talks two months ago with the World Jewish Congress (WJC).
All sides agreed to keep the talks secret, but claiming the WJC was in "dramatic violation" of the confidentiality agreement, the banks yesterday issued their "best offer" of $600m. They said they would not consider "unfounded and excessive" demands for more money and accused lawyers and Jewish representatives of "seriously jeopardising" the possibility of a settlement. There has been speculation that demands totalling more than $1bn had been made against the banks.
The banks' joint statement said: "By all legitimate criteria, this is a fair offer. The banks view this offer to be at the upper limit of what can be justified, based on the facts and circumstances." Rainer Gut, chairman of the Credit Suisse Group, said it was their final word.
But there were immediate signs that the brinkmanship could backfire. Avraham Burg, chairman of the World Jewish Restitution Organisation that links the WJC with other Jewish bodies, said the amount was "robbery and an evil deed. The three banks ... hid the stolen property for years and now are trying to earn interest."
Ed Fagan, a New York lawyer spearheading a class action for 31,000 Holocaust victims or their families, said: "When they are prepared to make a full offer we are prepared to consider it."
The surprise offer suggests the banks have decided to fight back in the face of continuing criticism. After initial denial of the scale of the assets which banks failed to return, they eventually admitted fault and placed around $70m in a fund set up in Switzerland for needy Holocaust survivors.
But a mood has developed in Switzerland that the "Nazi gold affair" has gone too far. A threat - which could still be carried out - by the financial comptrollers of several American cities and states to withdraw investments from Swiss banks has provoked widespread anger.
Some Swiss politicians believe a large payout by big banks would encourage demands against the Swiss central bank, which handled gold looted by the Nazis, and against the government, which turned back thousands of Jewish refugees at its borders.
A question mark must now hang over the talks, which were set up by Stuart Eizenstat, the US Undersecretary of State. If they collapsed, lawyers could push for a class action to be heard as quickly as possible at the federal court in Brooklyn, New York, where the claims have been filed.
Rainer Gut said: "If the other side walks away ... that would be the end of negotiations of a settlement and we would be back to square one."
Eldred Tabachnik QC, president of the Board of Deputies of British Jews, who have no direct involvement in the American class action, nevertheless welcomed the banks' offer as a "step in the right direction". But he said: "Whilst this is a sizeable sum, representing a sizeable admission of guilt, it is clearly up to the claimants ... to decide whether it is sufficient to constitute a full global settlement."
The $600m figure would not include repayments to victims or their families from any dormant war-time accounts still held in Switzerland and identified in the current round of independent auditing. The banks say they have included what it would cost if the case went through the courts.
Edgar Bronfman, president of the World Jewish Congress, said last year that Switzerland should be paying billions of dollars in restitution to settle Jewish claims.
Switzerland has been accused of two separate but related "crimes" - of accepting gold and other assets from Nazis when it must have known they were looted, and of putting insurmountable blocks in the way of people attempting to reclaim assets sent for safe keeping. However, a recent report in the United States showed Switzerland was not the only country guilty of doing so.Reuse content