Sw i s s Ba n k s - A Sa f e H a v e n

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Mo n e y f r o m a ro u n d th e W o rl
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Task 1: Read the text and write the reasons why many foreigners prefer to
save their money in Swiss banks.

Switzerland is not only well known for chocolate and its watch-making industry; it is also
famous for its unique banking and financial system. Banks play an important role in
Switzerland’s economy. Swiss banks have been considered to be the most secretive
in the world for many centuries. About a third of all money held outside a person’s
home country - hundreds of billions of dollars - is deposited in Swiss banks.
Banking in Switzerland goes back to the 18th century. In the past, not only rich people
but also authoritarian regimes and dictators have secured their money in Swiss
banks. Foreigners who live in unstable and troubled areas also tend to keep money
in secure Swiss banks instead of their own. During World War II German Nazis
deposited much of the country’s wealth, especially money and gold taken away
from Jews, in Switzerland.
Switzerland has two large banks - UBS and Credit Suisse. Private banking also has a
century-long tradition in the alpine country. Currently, about 130000 people work in
the banking sector. Major banks have overseas branches that employ thousands.
Switzerland’s popularity as a safe bank haven has many reasons. For one, the country
has a very stable and prosperous economy, and one of the highest per capita
incomes in the world. It has been neutral for many centuries, especially during the
two world wars. In addition, the Swiss franc is one of the most stable currencies in
the world.
Swiss banks have to follow very strict privacy rules. In 1934, a law was passed that
forbade Swiss banks to reveal the name of account holders. Banks protect the
privacy of their clients in a way no other country in the world does. If a Swiss banker
reveals anything about a person’s bank account without permission he commits a
criminal act. Such regulations have made Switzerland a popular destination for
foreigners who do not want to pay taxes in their own country.
Lately, however, the Swiss government has been under constant pressure by other
countries to change their bank laws, making it possible to reveal the names of possible
drug dealers or international criminals. EU officials claim that more and more citizens
are moving their money to Switzerland to escape taxation in their home country.
Income that is not reported to the government is often deposited in Swiss banks.
In the past decade Swiss bank officials have been
working together with international financial experts
to combat money laundering. Under new laws
they must report any financial transactions that
look suspicious.

Credit Suisse headquarters in Zurich

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POLINEMA Re a d i n g i n Bu s i n e s s a n d Ac c o u n t i n g
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POLINEMA Re a d i n g i n Bu s i n e s s a n d Ac c o u n t i n g 9
Task 2: Identify the verb phrases in the extracts below and name the tense of
each phrase.
Lately, however, the Swiss government has been under constant pressure by other
countries to change their bank laws, which make it possible to reveal the names of
possible drug dealers or international criminals. EU officials claim that more and more
citizens are moving their money to Switzerland to escape taxation in their home
country. Income that is not reported to the government is often deposited in Swiss
banks.
In the past decade Swiss bank officials have been working together with international
financial experts to combat money laundering. Under new laws they must report any
financial transactions that look suspicious.

Task 3: Many words listed below are defined in noun phrases with dependent
clauses. Identify twenty verb phrases in the noun phrases that contain
dependent clauses (See the three examples below).

Words
• account holder = person who has money in a bank
• act = action
• alpine = in the Alps
• authoritarian regime = government that is very strict to its people and does not
allow them basic rights or freedom
• billion = a hundred million
• branch = part of a company that does work in another country
• century = a hundred years
• claim = to say that something is true
• combat = fight
• commit = do something wrong or illegal
• considered to be = people think that …
• currency = the money a country uses
• currently = at the moment
• deposit = put, place, leave
• destination = target
• economy = the system by which a country’s money and goods are produced and
used
• employ = give work to
• escape = get away from
• especially = above all
• forbid – forbade = not allow
• foreigner = person who lives in another country
• haven = place where you can put something in order to protect it from danger
• however = but
• in addition = also
• Jew = someone , whose religion is Judaism
• law = rules that a country passes
• major = very important
• money laundering = when money that is received illegally is put into businesses
and banks in other countries , so that it is difficult for people to find out where it
came from
• neutral = not taking part in wars or helping other countries
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POLINEMA Re a d i n g i n Bu s i n e s s a n d Ac c o u n t i n g 10
• official = person in a high position in the government or other organisations
• overseas = countries across the ocean
• per capita income = the money every Swiss person earns in a year
• permission = being allowed to do something
• popular = well-known and liked
• popularity = something that makes a place very attractive
• privacy = about private things
• prosperous = wealthy, booming
• protect = guard
• regulations = rules
• reveal = make known
• secretive= private, guarded, well-defended
• secure = to make something safe
• strict =exact
• suspicious = something that might be against the law
• taxes = the money you must pay to the government for the income you get
• transaction = here: when money is transferred from one account to another
• troubled = with many problems
• unique = only one of its kind; very special
• unstable = here: areas where the political situation can change very often
• wealth = riches, money

Task 4: Your understanding of noun and verb phrases can help you read in
chunks to improve your understanding of the text and can even improve your
reading speed. Pay attention on the idea of reading in chunks below.
one eye span

Switzerland’s popularity / as a safe bank haven / has many reasons. /

• • •

the point of eye fixation

The country / has been neutral / for many centuries /,

• • •

especially during the two world wars./

•

A. Practice to read in chunks for the following extract.

1. There are / many types of financial institutions, / including banks, credit unions
and savings institutions. /
2. Banks come in all sizes / and are situated / in all locations, / from a branch in a
grocery store / to a larger bank in a big city downtown. /
3. Banks offer / safe, secure, convenient services / so you can save money / and
build a better financial future. /
4. Bank employees / can explain / what accounts and services / are available. /

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POLINEMA Re a d i n g i n Bu s i n e s s a n d Ac c o u n t i n g 11
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Internal users of accounting information are / managers who plan, organize, and run
the business. / These include / marketing managers, / production supervisors, finance
directors, / and company officers. / In running a business, / internal users / must
answer / many important questions, / as shown in the illustration below. /

Questions Asked by Internal Users

Finance
Is cash sufficient to pay
dividends to
Microsoft stockholders?
COLA
Snack chips Beverages
Marketing Human Resources Management
What price should Apple charge Can General Motors afford Which PepsiCo product line is
for an iPod to maximize the to give its employees pay the most profitable? Should any
company's net income? raises this year? product lines be eliminated?

To answer these and other questions, / internal users need / detailed information / on a
timely basis. / Managerial accounting provides / internal reports / to help users / make
decisions about their companies./ Examples are / financial comparisons of operating
alternatives, / projections of income from new sales campaigns, / and forecasts of cash
needs for the next year. /

External users are individuals and organizations outside a company who want financial
information about the company. The two most common types of external users are
investors and creditors. Investors (owners) use accounting information to decide
whether to buy, hold, or sell ownership shares of a company. Creditors (such as
suppliers and bankers) use accounting information to evaluate the risks of granting
credit or lending money. Illustration below shows some questions that investors and
creditors may ask.
Questions Asked by External Users
Yeah!
What do we do
if they catch us?
BILL
COLLECTOR

Investors Investors Creditors

Is General Electric earning How does Disney compare in size Will United Airlines be able
satisfactory income? and profitability with Time Warner? to pay its debts as they come due?

Financial accounting answers these questions. It provides economic and financial

information for investors, creditors, and other external users. The information needs of
external users vary considerably. Taxing authorities, such as the Internal Revenue
Service, want to know whether the company complies with tax laws. Regulatory
agencies, such as the Securities and Exchange Commission or the Federal Trade
Commission, want to know whether the company is operating within prescribed rules.
Customers are interested in whether a company like General Motors will continue to
honor product warranties and support its product lines. Labor unions such as the Major
League Baseball Players Association want to know whether the owners have the ability
to pay increased wages and benefits.

Source of text:
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2014). Financial Accounting. Danvers:
John Wiley & Sons, Inc.
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