For, what should matter to individuals is the financial security that the destination offers, even while the big picture — that this ‘quaint alpine oasis’ manages almost 40 per cent of the world’s private assets — is awesome, as the author argues.

“You can build your nest egg safely, quietly, and out of the reach of your own government, partners, creditors, nasty bosses, vindictive spouses, and maybe worse. Your estate, your banking, and your investments — the core of your new financial being — can be shielded by innovative Swiss structures and other strategies, that will insure that you and your family do not come up losers in the current global power game,” writes Barber, reassuringly.

He traces how ‘frightened money’ historically has found its way to Switzerland. “In direct response to the attempt by the Nazis to muscle their way into the Swiss banking system, Switzerland passed the famous Bank Secrecy Act of 1934. This piece of legislation is the very one being enforced to this day.”

Bank employees are subject to fines up to 50,000 Swiss francs and six months in jail should they disclose any information on an account or an account holder, explains Barber. “In addition, they are forbidden by law even to respond to an inquiry by anyone, private or government, without a court order.”

Despite the changes to the law in 1970, secrecy continues to be effective, ‘except in cases of evidence of a crime as interpreted by Swiss law,’ he adds. “As an example, tax evasion is not specifically a crime in Switzerland, so this would not be a good enough reason, in the Swiss point of view, to pierce their secrecy law, no matter who or which country that does criminalise tax evasion is doing the asking.”

Valuable read.

The recent noise about the risks of derivatives, the losses suffered by companies, and the urgent pronouncements by the Institute of Chartered Accountants of India (ICAI) on financial instruments and revenue recognition predictably triggered a panicky focus on the accounting of financial instruments.

During the 1990s the accounting standards did not keep pace with market derivatives activities, Pooja Gupta writes at the start of her book Financial Instruments Standards: A Guide on IAS 32, IAS 39 and IFRS 7 ( www.tatamcgrawhill.com ). “The publicity surrounding large derivative instrument losses at several companies had heightened the concern about accounting for derivatives. In 1993, the Global Derivatives Study Group (G30) proposed certain principles and disclosures, and recommended the harmonisation of accounting standards in this area,” she narrates.

One reason why we don’t have widespread knowledge about derivatives is that often these were not recognised on the balance-sheet, explains the author.

Also, “there was little disclosure about the extent of derivative use, the policies used to manage interest rate and currency risk and the risks to which a company exposes itself through derivatives.”

D. MURALI

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