What is the point of a Swiss bank if it is not secretive? That is the question that UBS must be grappling with right now. It would be wrong to overstate the differentiation that exists between banks such as UBS and Credit Suisse and every other giant bank with a private bank in its repertoire. The nouveaux riches do not necessarily seek out the grand old names of private banking when they want to stash their cash. But for old money, the legendary discretion of Switzerland’s bankers no doubt still holds considerable cachet. Were that to be stripped away by US regulators, UBS would have little left to boast about.

That is why the changes to the bank’s board yesterday seemed to be a matter of shutting the stable door after the horse had bolted. UBS has a lot on its plate. The Swiss Federal Banking Commission is breathing down its neck, angry that the bank and its rivals have brought the good name of Switzerland into disrepute by taking risks and making losses in the US sub-prime mortgage market. The regulator proposes tougher capital requirements that will restrain the amount of investment banking business that the banks can do. As UBS tries to rebuild its investment banking arm, this is not good news.

Analysts, meanwhile, are tearing into the bank over the near-certainty of more painful writedowns when it reveals its second-quarter results. Merrill Lynch, for example, has removed UBS from its list of European recommended investments.

Speculation about increased losses is likely to spook clients, who, according to private bankers, are already fleeing UBS’s wealth management business over fears that writedowns have destabilised the bank. The last thing these valuable clients need to hear is that UBS might be forced to reveal details of its American customers. Of course, very few of them are actually avoiding taxes, but even the possibility of the bank handing over customers’ details undermines the privacy at the heart of Swiss banking. Yet, if it fails to do so, UBS could find it increasingly difficult to do business in the lucrative US market.

As international co-operation on tax increases, as we have seen in Liechtenstein, such cases will become more common. As it continues with its review of the business, UBS might like to consider finding another unique selling point.

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