Moving money to safe Europe
The head of the Federal Deposit Insurance Corporation (FDIC) said in a meeting in San Francisco that many more bank failures will likely occur 2009. Could your bank be one of them? Is your deposit safe? Many advisors say it may be time for investors to diversify internationally. Europe has multitudes of large, safe, banks without exposure to the damaging U.S. mortgage disaster. In contrast, many U.S. banks are sitting on shaky ground.
Which countries have the safest banks in the world? Switzerland and Sweden. So, how safe is your Swiss bank account or your deposit in a Swedish bank?
Switzerland depositor protection is governed by the Swiss Bankers Association's (SBA) Depositor Protection Agreement. Since July 1, 2004 it was also written into law in the Swiss Banking Act. The Act adds several additional requirements that have substantially strengthened depositor security in Switzerland.
The revised Depositors’ Protection Agreement covers all deposits and also applies to non-bank securities dealers. Protecting depositors is essential in maintaining public confidence in the Swiss banking system. In order to solidify this confidence, the SBA had drawn up a self-regulatory Depositor Protection Agreement with its member banks in 1984.
This agreement guarantees that, in the event of a bank failure, depositors will rapidly receive their legally privileged claims. As an additional safety measure, Swiss law demands high capital adequacy. Swiss banks can therefore certainly be counted amongst the safest in the world.
The Swiss franc is considered one of the world’s premier currencies with virtually zero inflation and has been historically backed by at least 40 percent gold reserves. Swiss banks are also known to have very sophisticated investment services and Internet banking.
“The first step in establishing a foreign account is to establish an offshore company, since many foreign banks will not open accounts directly with U.S. people or companies. The next step is to open the bank account in the offshore company name,” says Kevin Wessell, business planning expert and CEO of Offshore Company.
“It is very important to note that U.S. people are taxed on worldwide income. So, this is not a tax avoidance strategy, it is a fully-reported financial diversification and asset protection move. The U.S. and many other governments are cracking down on those whom use offshore trusts in an attempt to avoid paying taxes or hide money from their governments. Offshore Company ensures that its clients offshore trusts are set up and filed properly and meet government legal requirements,” says Mr. Wessell. ■