Under the deal, penalties ranging between 20 and 50 per cent will be levied depending on how actively the Swiss banks sought new business after August 1 2008, the time when the US began cracking down on citizens who were hiding money in Switzerland. The Basel-based Swiss Bankers Association said: 'The fines… are at the upper end of legally acceptable and economically bearable levels.  It is, however, the sole remaining solution for enabling the banks to resolve the legal problems with the U.S. conclusively, and for creating legal certainty.'

Two evils

Walter Boss, a tax lawyer at Poledna Boss Kurer in Zurich told Reuters: 'It's a choice between two evils [for the Swiss banks]. If they don't co-operate with the US, the US might indict them.'