Credit Suisse is telling German clients it will stop doing business with them if they don't provide evidence their accounts comply with tax reporting rules.

The policy applies to all accounts held by German clients, who are being asked to submit bank documents or tax certificates to prove their funds have been taxed.

A spokesperson for the bank told WealthBriefing: "What we (and other banks) are doing is asking German clients to come up with evidence that their assets are taxed."

The focus on German account holders comes after the German parliament last year blocked a German-Swiss tax treaty under which secret bank accounts would be declared, and tax bills disclosed, in exchange for reduced penalties.

Swiss banks have felt the pinch as countries such as Germany have turned less tolerant of the Alpine state’s historic bank secrecy laws.

Last October, WealthInsight, the research firm, said the global private banking industry had total assets under management of $19.3 trillion, of which $8.3 trillion – or 42 per cent – is offshore and Switzerland currently holds $2.8 trillion of cash. By 2016, however, Switzerland’s figure is predicted to drop below $2.0 billion. 

The Alpine state’s historical bank secrecy laws have come under relentless international assault from governments trying to halt an exodus of tax revenues. Firms such as UBS and Julius Baer, for example, no longer provide offshore banking to the US; Switzerland has also inked a number of bilateral agreements with nations over tax. The impact on Switzerland from any shift in its status will be significant: more than 80 per cent of funds held in the country are for foreign clients.

Switzerland holds 14.5 per cent of the global wealth industry’s AuM, second only to the US; offshore wealth - $2.1 trillion - makes up the vast majority of this money. Switzerland holds 34 per cent of all offshore wealth, making it the single largest such jurisdiction.