German banks abandon US customers
The Local · 15 Dec 2011, 08:06
Published: 15 Dec 2011 08:06 GMT+01:00
According to the Financial Times Deutschland (FTD) newspaper, HypoVereinsbank is the latest financial institution to tell US citizens and all its clients residing in the United States that it is closing their brokerage accounts.
Deutsche Bank already made the move earlier this year and Commerzbank has said it is studying whether to do the same, FTD reported. Elsewhere in Europe, both the British HSBC and Credit Suisse have said they won’t take Americans’ investment business anymore.
None of the banks have said they are restricting Americans’ run-of-the-mill banking activities such as making deposits into normal savings accounts.
That’s because those transactions aren’t yet covered by US regulations that as of the beginning of 2011 have required banks to make detailed disclosures to American authorities about US customers’ security holdings.
The US government has claimed the requirements are meant to make it easier to prosecute Americans trying to dodge taxes on their investments.
But some in the German financial sector think the rules are actually calculated to make it harder for Americans to invest money abroad, thereby forcing them to put their cash in US banks, according to the FTD.
The regulations will only get more complex in 2013 when the US Foreign Account Tax Compliance Act comes into effect. That will require banks to report more information about account holders to American tax authorities, although specifics about what the law will require remain elusive, angering many in the financial services industry.
In any event, German banks have said they’re being forced to invest millions of euros in updating computer systems to ensure their legal obligations are met.
“This is a tremendous burden on institutions,” a spokesman for the Association of German Banks griped to FTD.