The Swiss banks agreed on Thursday to negotiate the settlement after talks with Stuart Eizenstat, the American Under-Secretary of State, lawyers who have launched multi-million dollar claims against the banks and with the World Jewish Congress.
The meeting followed threats from US states and cities to boycott the banks for obstructing Holocaust survivors' efforts to recover assets placed in accounts in Switzerland before or during the Second World War. Mr Eizenstat has suggested that all the plaintiffs whose money and other assets were held by Switzerland should receive a payment from a "rough-justice fund", though the exact billion-dollar figure is still to be established.
The proposal was cautiously welcomed and in Britain the Holocaust Educational Trust claimed it would set a precedent which the British government should observe.
The Government is due to publish next week a report into its war-time Trading with the Enemy Act which gave Britain control over money and assets deposited in its banks by people living in Germany, Bulgaria, Romania and Hungary.
Some of these people were Jews who placed their valuables in Britain because it was a safe haven, but then found it difficult to reclaim them after the war. Some died in the concentration camps, taking any proof of ownership with them and making it impossible for families to claim.
Lord Janner, chairman of the Holocaust Educational Trust, has called on the Government to compensate those who lost money invested in British banks in this way. He fears it will refuse. Some officials believe that the question of assets was settled in end-of-war negotiations, but Lord Janner believes the final agreements were unfair: "I hope the Government will look at what's happened over the Swiss banks and change their minds before Britain runs into a barrage of ignominy."
However, there was some evidence yesterday that the settlement proposed in New York was unlikely to keep all sides happy. The Swiss Bankers' Association said it was concerned that the American local government officials had not completely lifted the threat of sanctions against the banks. And a Jewish leader in Israel, Avraham Burg, dismissed the global offer as a public relations ploy. "The only settlement we can accept is one that we can take to the survivors," he said.
The Swiss government was at pains to point out that the three banks involved, Credit Suisse, the Union Bank of Switzerland and the Swiss Bank Corp, were acting alone. It has set up its own procedure to investigate the banks' activities, the Volcker commission, and that would continue. Accountants are studying bank accounts which have lain dormant since the war.
Alan Hevesi, the New York City financial comptroller who led the talks, said the participants will meet again on 24 April and he expected a final deal could be worked out within 90 days of that session. Mr Hevesi heads a panel representing 800 financial officers of state and municipal governments in the US whose potential financial might had seriously alarmed the Swiss banks.Reuse content