Tax raids by governments on private banks, such as the one on Wednesday by German investigators on Credit Suisse offices, are a short term move by governments to raise cash but do not address the underlying problems, according to one family office executive.
Frederick Shepperd, founder of Switzerland-based family office Shepperd Investors AG, said: "It is an unfortunate sign of the times. Governments are so desperately short of cash so they resort to looking anywhere for taxes, rather than supporting new business growth.
"Going for taxes with raids and the like is an unfortunate diversion, causing immense distress for all involved and a theatre for those who are not," he said.
Wednesday's raids saw 13 Credit Suisse offices searched in relation to an ongoing investigation by Germany prosecutors into whether Credit Suisse bankers helped clients evade taxes. Credit Suisse confirmed the raids had taken place and said the bank is "working in close cooperation with the relevant local authorities."
When contacted by Campden FB, Credit Suisse spokesman Marc Dosch said: "We cannot comment any further on the investigation, but we are sure we do business in compliance with all the rules and regulations. Compliance is the cornerstone of what we do and we are very strong in that area."
Despite viewing the raids as a distraction, Shepperd believes the overall move towards transparency is a positive one. "Transparency is a hassle because of the paperwork but can and should be done. It makes decision making much easier because you know what you are dealing with," he said.
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