UBS shares rally on Swiss pledge on bank secrecy

UBS shares rallied almost half franc and the Swiss currency rose when Reuters beat the competition by over 35 minutes on the Swiss Finance Minister Hans-Rudolf Merz remarks that banking secrecy in his country would be maintained. Our coverage was timely a day after UBS and the U.S. authorities announced that UBS had agreed to pay a $780 mln fine and to identify certain U.S. clients suspected of tax fraud to resolve criminal charges it had helped rich Americans evade taxes. The news, with implications for the entire $7 trillion offshore wealth management industry, put pressure on the Swiss franc on speculation the Swiss government would tighten banking secrecy laws. But the franc recovered to 1.49 per euro from 1.4945 on Merz`s comments that banking secrecy would be maintained although it did not protect fraud. Shares in UBS, already up on news of the deal, rose to 12.94 francs from 12.53 when the Reuters alerts first hit the screen.