So far, the Liechtenstein/Germany affair has had little effect in Switzerland with most people regarding this as a storm in a teacup in terms of Swiss private banking. Indeed, last February a spokesman for the Swiss Federal Finance Department told WealthBriefing that the current agreements between Switzerland and the EU in the areas of savings tax, fraud and other criminal activity are sufficient - nothing needs to change he said. Last week, however, the German TV station ZDF aired an episode of Frontal21 in which they claimed that UBS, the Swiss banking and wealth management giant, actively assists German residents in tax evasion. A reporter for the television channel approached UBS in Baden-Baden posing as a real estate agent and asked to place several hundred thousand euros in Switzerland. The bank employee was caught on a hidden camera reassuring the reporter that the bank maintains complete confidentiality (not that this is a crime). The programme alleged that another employee of the bank in Basel stated that as a Swiss citizen he had no concern as to whether the prospective client does or does not pay his German taxes – but then again, why should he? In the event that the client does not disclose the assets to the German authorities, the European Union Savings Tax Directive applies. A spokesman for the Swiss Bankers’ Association would not comment on the television programme or allegations about UBS but did say it would respond to any specific allegations made against Swiss banks. At present, the debate seems to be more emotional than substantive. But was the Liechtenstein affair merely smoke and mirrors to disguise the real object of attack – the Swiss private banking industry? Over the weekend, the International Herald Tribune published an article on this subject quoting Thomas Borer, a former Swiss ambassador to Germany, as saying that not many people inside Switzerland appreciate the depth of foreign discontent. This underestimation could have serious consequences. Remember the late 1990’s and the dormant accounts from the Holocaust era? Swiss banks tried to ignore the problem then and it cost them dear both in financial terms and in reputation. Whatever the future holds, the official reaction in Switzerland remains that this is an old story whipped up by the media. Jean-Christophe Pernollet, managing partner in Geneva for PricewaterhouseCoopers, the accountant and consultancy, is more rational in his analysis. He notes that, in the PwC private banking survey published in 2005, one of the main themes was the move to multi-onshore business - which is why there is a branch of UBS in Baden-Baden in the first place. UBS has expanded aggressively in various onshore markets. There are a number of legitimate reasons for wishing to hold assets offshore. The money laundering debate is over. Money laundering is a crime and banks are required to be certain of the legitimate source of assets deposited with them. There is no argument there. However, Mr Pernollet said: "Banks are not tax collectors. Individuals have a responsibility to report their assets to the relevant tax authorities." Swiss banks are banned from aiding tax evasion by providing false or partial statements, for example, but he added: "It is not up to a Swiss bank to ascertain whether its clients are filling in their tax returns correctly." Mr Pernollet also urges us to consider the EU Savings Tax Directive. The initial idea was for exchange of information so that an EU resident with assets in another member state would automatically declare this data to his taxing authority. That met with resistance from certain EU member states such as Luxembourg and Belgium. This resulted in a withholding tax regime being agreed. "Switzerland follows these procedures as do other EU states. And there are plenty of other jurisdictions outside of the EU that do not," said Mr Pernollet. While the issue is not going to go away, there is a hint of hypocrisy in the German approach of targeting Switzerland and not other European offshore jurisdictions. This combines with a Swiss political machine that does not seem to offer strong support to its banking industry. "Swiss bankers in Singapore are amazed that the regulator, famed for its strictness, also sees itself as responsible for promoting Singapore as an offshore centre," noted Mr Pernollet. It is certainly true that any tightening of the noose in Switzerland will merely result in funds moving to other jurisdictions where the EU has less influence. For now, however, the current political game will continue. And in the long term, we all face the two great certainties, death and taxes (but maybe not taxes).