Lugano’s private banks are secretly hoping the opposition centre-left coalition led by Romano Prodi is elected in next month general electio...

Lugano’s private banks are secretly hoping the opposition centre-left coalition led by Romano Prodi is elected in next month general election in Italy. Mr Prodi’s coalition has said that it will implement a wealth tax of between 10-20 per cent if elected, which is expected to be a major boon to offshore centres, such as Lugano, where wealthy Italians have traditionally placed their money. “Most of us want Mr Prodi to win in terms of our business,” a private banker told WealthBriefing. Mr Prodi and his coalition partners are leading in opinion polls in Italy by around 5 per cent against the incumbent, Silvio Berlusconi, and his centre right coalition government, although many commentators believe this will narrow closer to the election on April 9-10. Despite the outcome, private banking in Lugano has witnessed a significant revival in recent years, according to a number of bankers WealthBriefing spoke to in Switzerland’s fourth largest financial centre. “After the introduction of the Italian tax amnesty in 2001 many of us struggled as a significant proportion of offshore money went back onshore,” said one private banker. “But times are much better today.” Private banks and their clients have been able to bypass offshore restrictions by setting up trust companies, say private bankers in Lugano. “These are mostly declared funds managed offshore,” said one private banker. “There are some limitations on what you can do with the accounts, but they have proven very popular with wealthy Italians seeking some anonymity, albeit not from the tax authorities.” Private bankers say these trust companies are not necessary being set up just by the very wealthy. “They may have been established by clients with as little as €500,000 ($604,000),” said one private banker. Many of these trust companies are being set up with insurance wrappers, giving them extra security, say bankers.