Swiss bank vaults fill up as wealthy get financial jitters

Swiss banks are running out of safety deposit boxes as wealthy clients suffer the jitters about the global economy and governments chasing them for tax.

Vaults are stuffed to overflowing with bank notes, gold, art, jewellery and other valuables, claim the banks.

Many bankers claim they have put up ‘no vacancy’ signs for deposit box renters, while specialist insurer Baloise reports customers have requested higher limits for valuables held in safes on their premises.

“Without giving too many details, I can confirm that safes at some banks are somewhat fuller than they were a few years ago,” said a spokesman for the firm.

The banks say customers are switching their wealth out of funds and equities in to more liquid assets like Swiss 1,000 franc notes, gold and art because they fear inflation and market volatility could wipe out their holdings.

Some, confirm the banks, are also scared of the consequences of tax deals between Switzerland, the UK and Germany that could open up their secret accounts to scrutiny.

However, the deal does not cover the contents of confidential safety deposit boxes which are not listed as accounts by the banks.

The tax treaties base withholding tax on balance in late 2010 for accounts that have gone down by less than a fifth in the past two years to deter the wealthy from moving their money.

Some banks have admitted urging clients to withdraw cash balance of less than 2 million francs by converting them in to cash and putting them in deposit boxes to avoid tax.

Just how much cash and valuables are secreted in Switzerland is unknown, and the banks are keen to keep the numbers to themselves. According to news group Reuters, german clients alone have an estimated hidden wealth of €200 billion of untaxed funds in the country.