Known for its centuries old tradition of bank secrecy, Swiss banks are constantly lambasted for being the private bankers of dictators and plunderers. Cash, jewelry, paintings, gold bars and items of value that are believed to have been looted from poor economies, through the ages, are said to be kept in Swiss banks. As a young boy, I even read an article about dirty money and somebody was quoted to have said that Swiss banks are probably sitting on King Herod’s riches, until now.

Well, a crack has appeared on its once thick formidable walls. The Union Bank of Switzerland (UBS) has announced that it is now putting an end to providing private banking services to US clients. The move came after the company attracted increasing attention from US regulators. The company decided that letting go of US clients is the best business decision despite the fact it will eat into its profits. UBS’ Private banking services raked a profit (before taxes) of US $5.3 Billion in 2006 but at this point, there is no available data on how much of that came from wealthy US clients.

Most probably, the move to partially end its long tradition of banking secrecy was done in order not to compromise its onshore operations in other countries, specifically its huge exposure in the United States. In fact, one fourth of UBS’ entire staff is said to be in the US.

Whatever the real reasons may be, behind the move to end private banking for US citizens, it is but rational to believe that it will probably be duplicated in other countries within the coming days. In addition, other Swiss banks will probably implement similar moves in order to cope with the changing times.

In order to avoid recession, President George Bush proposes a tax rebate for low and middle income Americans. At this point, there is an ongoing argument whether the rebate should be given to all Americans or only to families with a combined annual income of US$100,000. Bush is expected to elaborate on this plan during his State of the Union Address on January 28, 2008.

At this point, democrats are working on a similar proposal and intends to meet with Bush in order to speed up the drafting of the final measure. All this went full steam when last week’s reports showed that manufacturing contracted and unemployment jumped in December. Hopefully, the measure will work and lead to more rebates and tax cuts for the entire US population. There’s no better news than the thought that none of your income will go to taxes.

For the past few weeks, I have noticed a sharp increase in messages supposedly coming from Paypal and Moneybookers asking me to verify my account or receive a money transfer by logging into my account. Sometimes, I will receive four of such messages within one day. Having been previously warned of such type of attempts to steal passwords, I was able to successfully avoid the traps.

For all of you reading this article, regularly run your anti spyware programs (especially prior to logging into your bank accounts), avoid downloading any attachment into the computer that you use to access your sensitive accounts (bank, paypal, credit cards, etc) and never login to your account by clicking on links attached to emailed messages. Always open a new browser and type your bank’s url, instead of clicking into the link specified in an email.

At the moment, there is a serious threat that currently hounds the banking system. A group of hackers were able to successfully create very intelligent software that automatically hacks into bank accounts and empties it within seconds. The victims are specifically targeted after being identified in hacked databases. In this Modus Operandi, victims normally receive emails that contain their names and bank account numbers. They are then asked to download a onetime password or soft token that actually steals their passwords and commences a fast transfer of funds.

At this point, large accounts in some banks in the US, Spain, Italy and the UK have been victimized. Hopefully, the Internet world will be able to solve this problem before greater damages are created. In this world where “the customer is supposed to be always right”, it is sad to admit that the prevailing thought is very still “Caveat Emptor”.