Legacy

Reputational lessons

The dormant accounts controversy was the first great reputational crisis of the Swiss financial centre in the age of globalised media and markets. It taught the banks that their conduct would be judged by foreign standards, in foreign forums and with foreign procedural instruments. The defensive reflexes that had served them in the post-war decades, including reference to banking secrecy, insistence on strict proof and discreet negotiation with governments, proved counterproductive in a conflict conducted before American courts, in Senate hearings and on television. The comment of a bank chairman that the sums involved were “peanuts”, the remark of a Federal President about “blackmail” and the image of a shredding room in Zurich did more damage than any legal argument could repair.

The episode also showed the value of independent investigation. The Volcker Committee and the Bergier Commission established facts that both sides could accept, in reports that have become reference works for the history of the period. Swiss institutions have since used similar approaches in other contexts, from internal investigations by independent law firms to the commissioning of historical studies on corporate histories. The practitioner who advises a Swiss financial institution in a reputational crisis today will usually recommend an early, independent and credible investigation, with published findings, as the first step. The dormant accounts affair is the case study behind that recommendation.

Record-keeping

A second legacy concerns records. The Volcker audit could examine only about sixty per cent of the accounts that had existed between 1933 and 1945, because the records of the rest had been destroyed under the ten-year retention rule. Although Swiss law still requires the keeping of business records only for ten years, banks have become far more cautious about destroying historical records. The large banks have since given their historical archives a more deliberate place in their organisation. The prohibition of destruction in the federal decree of 1996 and the Meili affair have made the destruction of potentially relevant documents during an investigation one of the gravest compliance failures that a Swiss bank can commit.

The subsequent development of anti-money laundering law, discussed in chapter F.V and in Part I of this book, has reinforced this culture. The duty to identify the beneficial owner, to document the background of transactions and to keep records has made the modern Swiss bank a documented institution. To these duties the dormant accounts regime has added the duty to preserve contact with clients. What was once a matter of discretion has become a matter of regulatory obligation. In that sense the controversy of the 1990s contributed to the transformation of Swiss banking from an industry that valued the absence of records to one that values their completeness.

The return of the past: Credit Suisse and the Senate after 2020

The settlement of 1998 was intended to close the matter for good. It did not entirely succeed. Following allegations about accounts of persons connected with the National Socialist regime, Credit Suisse commissioned in 2020 an investigation overseen by an independent ombudsperson, the American lawyer Neil Barofsky. The Senate Budget Committee took up the matter. In August 2023 it reported that the bank’s internal investigation had been hampered by scoping restrictions, that nearly one hundred previously undisclosed accounts with links to the National Socialist regime had been identified, some of which had remained open until 2020, and that Barofsky had been blocked from accessing material critical to the investigation.¹ Credit Suisse had removed Barofsky from his role in November 2022. After the takeover of Credit Suisse by UBS in June 2023, he was reinstated in late 2023.²

In February 2026 the Senate Judiciary Committee held a hearing on the subject under the title “The Truth Revealed: Hidden Facts Regarding Nazis and Swiss Banks”, at which Barofsky and representatives of UBS testified.³ Barofsky reported that the investigation had identified 890 accounts potentially linked to the National Socialist regime, held by 628 individuals and 262 legal entities, far more than previously disclosed. He also stated that without access to some 150 documents that UBS regarded as privileged, he could not give assurance in his final report that no stone had been left unturned.⁴ UBS then asked Judge Korman, who still supervised the settlement of 1998, for an order clarifying that the settlement covered all claims, past, present and future, relating to the Holocaust and the Second World War. The Simon Wiesenthal Center opposed the motion.⁵ In early April 2026 Judge Korman declined to issue what he regarded as an advisory opinion, since there was no lawsuit or motion against UBS before him.⁶

These developments are still unfolding at the time of writing. They show that the settlement of 1998, although it released the Swiss banks from legal claims, could not release them from the historical question. They also show that a bank which acquires another bank acquires its history. For UBS, which had paid the larger share of the settlement in 1998 as the Union Bank of Switzerland and had since become the successor of Credit Suisse, the past of both Zurich big banks has returned in the form of a single institutional responsibility.

History and identity

The controversy of the 1990s also changed the way in which Switzerland discusses its history. The image of a small neutral country that had resisted the pressure of its totalitarian neighbours through armed readiness and prudent diplomacy had dominated the post-war decades. The Bergier Commission, whose work chapter F.III describes, replaced that image with a more complex picture in which economic cooperation with Germany, the refugee policy and the handling of dormant assets occupied a central place. The debate was intense and often bitter. Parts of the public regarded the pressure from the United States as unjust and the demands of the Jewish organisations as excessive, while others welcomed the opportunity for a critical examination of the national past. The vote of 2002 on the Solidarity Foundation reflected this division.

The political effects were lasting. The debate on the Second World War contributed to the rise of a national conservative movement that presented itself as the defender of Swiss independence against foreign pressure. Christoph Blocher, the leading figure of the Swiss People’s Party in Zurich, gave a much-noticed speech on 1 March 1997 under the title “Die Schweiz und der Zweite Weltkrieg – Eine Klarstellung”.⁷ On the other side, a generation of historians, journalists and teachers used the findings of the Bergier Commission to revise school textbooks and public commemoration. Neither side has fully prevailed. The episode remains a reference point in Swiss debates on neutrality, on relations with the United States and on the responsibilities of the financial centre.

For Zurich as a financial centre, the most important legacy may be the recognition that a reputation for trustworthiness depends on how an institution treats those who cannot defend themselves. The victims of persecution and their heirs were the weakest of all bank clients. They had no documents, no lawyers, often no country willing to protect them, and in many cases no one alive who knew that an account had existed. The post-war practice of the banks treated them as ordinary clients who had failed to meet the formal requirements of the contract. The controversy of the 1990s demonstrated that such treatment, however lawful it might have been, could not be sustained against the moral judgement of the world. That insight has shaped the self-understanding of the Swiss financial centre ever since, even where its practice has fallen short of it.

Notes

1. United States Senate Committee on the Budget, “Credit Suisse Failed to Fully Investigate Nazi-Linked Accounts, Full Report Confirms”, press release of 17 August 2023, https://www.budget.senate.gov/chairman/newsroom/press/credit-suisse-failed-to-fully-investigate-nazi-linked-accounts-full-report-confirms. ↩
2. swissinfo.ch, “Credit Suisse Links to Nazi-Era Accounts Expand in Investigation”, 4 January 2025, https://www.swissinfo.ch/eng/credit-suisse-links-to-nazi-era-accounts-expand-in-investigation/88675748. The article reports Barofsky’s letter of 17 December 2024, which referred to several hundred alleged intermediaries and to accounts of more than three dozen persons connected with the ratlines. ↩
3. Jewish Insider, “Senators demand UBS release documents on Credit Suisse’s Nazi ties”, February 2026, https://jewishinsider.com/2026/02/ubs-credit-suisse-nazi-ties-senate-judiciary-committee-hearing/, which gives the date of the hearing as 3 February 2026. ↩
4. Jewish Telegraphic Agency, “Credit Suisse had many more bank accounts with Nazi ties than previously known, investigation finds”, 6 February 2026, https://www.jta.org/2026/02/06/united-states/credit-suisse-had-many-more-bank-accounts-with-nazi-ties-than-previously-known-investigation-finds. ↩
5. Insurance Journal, “UBS Urges US Judge to Curb Liability for Nazi-Linked Crimes”, 11 March 2026, https://www.insurancejournal.com/news/national/2026/03/11/861452.htm. ↩
6. Claims Journal, “UBS Loses Legal Bid to Clarify 1999 Holocaust Asset Accord”, 8 April 2026, https://www.claimsjournal.com/news/national/2026/04/08/336758.htm. UBS stated that the settlement “was intended to achieve a global resolution through a conclusive end to the controversy”. ↩
7. Parliamentary Services, chronology “Die Schweiz im Zweiten Weltkrieg”, entry of 1 March 1997 (“Referat von Christoph Blocher ‘Die Schweiz und der Zweite Weltkrieg. Eine Klarstellung’”), https://www.parlament.ch/centers/documents/de/ch-wk2-chronologie-d.pdf. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.