57 
safe even if they took advantage of “regulatory 
arbitrage”.9 
For such banks, any 
conce ssions on banking secrecy would compromise their business models. Instead, 
they saw the UBS sc andal as an op portunity to poach clients from a struggling 
rival. 
After 2009, howe ver, it was becoming increasingly clear that the cri sis was not 
restricted to UBS alone. The vulnerabili t y even of traditional pr ivate banks with 
no representation outside Switzerland was forcefully demonstrated by a criminal 
indictment of Wegelin & Co. in Fe b ruary 2012 that resulted in the bank’s collapse 
within a few weeks. Representatives of the Swiss financial services industry now 
demanded decisive and resolute political a ction to resolve the crisis, inc luding the 
acceptance of AEI on tax matters. However, their voices went unheard be cause the 
mode of political inte rac tion had by that time shifted from informal deliberations 
between governm ent officials and representatives of the financial services industry 
to formal disputes between political parties (Culpe pper 2011). Put simply, by the 
time the indus try had finally established a common position (about four years after 
the beginning of the conflict), it had lost c ontrol of the issue ; political partie s were 
now set ting the agenda and they would not help the financial services industry by 
compromising on banking se crecy regulations because voters seemed against the 
idea. The interna tiona l conflict over Swiss banking se crecy had turned into p oliti- 
cal v ote-see king rat her than solution -orie nted policy-making.   
In Liechtenstein, by contrast, the political reac tion to international pressure was 
coordinated between the government, the Prince ly House and representatives of 
                                                      
9 
In addition to a s eries of news paper articles (e.g. see the quotations from Patrick Odier, Presi- 
dent of the Swiss Bankin g Association, in NZZ, “Der Bankenverband übt Selbstkritik”, Septem- 
ber 4, 2013 ), this view was also expressed in the criminal proceedings against Wegeli n & Co. 
(see Bruderer 2012). 2012).