Swiss bank Weglin is going out of business after it pays the US a $58M fine for helping wealthy Americans evade taxes. The handling of this situation is emblematic of how the Obama administration handles problems in our financial system.
When companies are engaging in illegal activity, the US government begins with a fine and deferred prosecution agreement with a major offender. In the case of Swiss tax evasion, the US levied a $780M fine against UBS in 2009 as part of a deferred prosecution agreement. That action resulted in most Swiss banks stopping this activity - Weglin chose to fill the void:
Other banks have in recent years moved to prevent US citizens from opening offshore accounts.Additionally, three Weglin bankers are facing criminal charges.
US Attorney Preet Bharara said: "The willfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement."
I think this graduated approach to dealing with illegal action by financial institutions balances three desires of the Obama administration: to cost-effectively recover damages, to disincentivize the illegal behavior in the future, and to prevent costly shocks to the financial system. To those ends, I think our government is doing a decent job.