When I moved from England to Spain exactly four years ago, I began investigating how to manage my multi-currency financial situation. All of my assets were in British Pounds, my salary was in US Dollars, and I would be living in Spain paying all my bills in euros. My investigations led me to one of the most respected institutions in all of banking: Swiss Banks. At the time, there were not many banks that had support for multiple currencies, and the ideal of having my £, €, and $ all in the same bank, the tax free interest, and the allure of having a Swiss bank account were too much to bear. I signed up. In retrospect, even very quickly after the decision, this was clearly a mistake. There was a ridiculous (when compared to other banks) one-time setup fee of around $250, plus, to avoid actually traveling to Switzerland, all sorts of documents had to be notarized. Once the account was funded, I began looking for some investments, stocks or bonds to put the money in until we were ready to purchase a house in Spain. All of these had fees to set up. My banker, who was always very, very courteous and helpful, found two bond purchases for the length of time I wanted that would have a decent yield. The yield, however, was NOT any higher than what your local bank can give you. It was slightly more exotic purchasing bonds in New Zealand dollars, though. Over the year of their existence, these investments completely tanked! My banker apologized profusely and, because the bonds were worth less than my banker had guaranteed for the investment, the bank coughed up the difference so that I at least got back what I put in.
Yet another way that my reasoning in opening this account had been flawed was based on a fundamental misunderstanding of how international wire transfers work; mainly that they're expensive to initiate. Most banks charge a flat fee for initiating a wire transfer, so you don't want every paycheck to be wired, you want to let as many as you can afford to build up, and then send a large chunk of money. So why in Geneva's name should I use a Swiss bank as an intermediary between the US and Spain if that means that my money has to go through two wire transfers instead of one to get here? Stupid stupid stupid.
Oh, and the fees. Did I mention the fees? My swiss bank account charges me 20.00 USD every year just to keep my account open. They are charging me to hold my money! They really can't invest it wisely enough to cover the cost of sending me four paper statements a year?
A couple years ago, after two failed attempts at earning some interest on my money, I pulled all of it out of my swiss bank account except for enough money for the account to survive the ridiculous annual fee for another two decades, just in case it ever came in handy (for when that million dollar check comes in, you know).
The first surprise came last year when my banker wrote to inform me that, against all that is sacred about Swiss secrecy, they would now freely give information about my incoming and outgoing transactions to any government that asked them for it. This pissed me off. Not because I have secrets, but because I believe in secrecy.
Today I received a new email informing me that my Swiss bank "no longer serves my kind."
Dear Mr. Rasmussen,
I have to inform you of the new policy introduced by our bank.
Up to now, American citizens have to pay taxes on any kind of US securities not only in Switzerland but worldwide. IRS is implementing a new policy by which every assets (equities, savings accounts, currents accounts, fiduciary investment,...) will be liable to an income tax regardless of the country of residence.
As many banks worldwide, [BANK-NAME-REDACTED] has applied to the Qualified Intermediary status (which is compulsory for banks who intend to deal with any kind of US securities). As a consequence, we would have to ask our American clients to fill up the W9 form by which our clients would authorise the bank to report their assets to the IRS. The bank prefers not to deal with these sensible issues.
Considering the aforementioned facts, the management of the bank has decided to cease collaboration with all our American customers therefore I have no other choice but to ask you to close your account as soon as possible. I would need your bank account details for the transfer or I could send you a bank cheque. I am deeply sorry for the inconvenience caused but the the new US tax regulation does not leave us with any other option.
I stay at your disposal for any further information.
Best regards, [BANKER-NAME-REDACTED]
My first reaction was, of course, total absolute ear-steaming fury towards my government for using its financial clout to bully international banks into giving up private information about their American clients. My second reaction was pride for my Swiss bank for telling the IRS where to shove their W9. This was followed by the realization that the Swiss bank wasn't actually standing up to the IRS bullies, they were wussing out and being like...hmmm...what's that country that's always neutral in disputes?...anyway, they were choosing to get out of the middle of an income tax privacy rights shitstorm. Not a bad move, I suppose.
And so the chapter on one of my larger financial blunders comes to a close. I'll send them my Spanish IBAN so they can send me the few pennies I have left, enough to buy a bottle of wine and toast to the days when I could, but never did, speak of "my Swiss bank account."