SHARE
COPY LINK

ECONOMY

Market watchdog Bafin probing UBS unit

Financial markets watchdog Bafin is investigating a subsidiary of Swiss bank UBS that German officials suspect may have helped clients avoid paying taxes, Bafin and the bank said Thursday.

Market watchdog Bafin probing UBS unit
Photo: DPA

“We are checking whether directives against money laundering are respected by UBS,” a Bafin spokesman told news agency AFP.

UBS confirmed in a statement that its German subsidiary was the target of a probe by the German watchdog, with which it was working in “close cooperation.”

A UBS spokeswoman contacted by the German magazine Der Spiegel said Bafin had launched its probe following one by prosecutors in Frankfurt to determine if the Swiss bank systematically helped clients avoid taxes. UBS is carrying out an investigation of its own, the spokeswoman said.

Bafin cannot sanction banks directly if it uncovers evidence of wrong-doing, but can order that remedial measures be taken.

The affair was revealed when a UBS customer told Frankfurt prosecutors the bank had helped him set up a false address in Zurich to defraud the German tax system.

In March, prosecutors in Düsseldorf, western Germany, opened a separate investigation of some 1,100 Credit Suisse clients suspected of tax fraud, a probe that included bank workers.

German tax authorities can expect to rake in more than €1 billion ($1.35 billion) from tax dodgers after buying a CD containing their names, a German tax union said Saturday.

Relations between Germany and Switzerland have been strained by alleged tax fraud for several years, and they are currently negotiating terms of a treaty to avoid double imposition.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

READ ALSO:

With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

SHOW COMMENTS