Swiss bank accounts go online

In a move that_s worrying some regulators, Geneva-based MFC Merchant Bank will open Swiss bank accounts over the Internet with initial deposits as low as $5,000. U.S. residents have not been banned from having foreign accounts. But the Internet makes them more accessible, creating an easy way for money to be stashed offshore. Swiss bank accounts have been an infamous tool for hiding money from business partners, spouses and the government because they are beyond the jurisdiction of the U.S. legal system in most cases. U.S. citizens are required to tell the Internal Revenue Service if they have foreign accounts. But regulators admit it_s an honor system, although those caught with undisclosed accounts can face criminal and civil penalties."This is a problem we will see more of," says Oliver Ireland, associate general counsel with the Federal Reserve. "If (a bank in a remote country) sets up a site accessible from the U.S., how do you stop it?" Under international pressure, the Swiss stopped offering numbered accounts with no names attached. But U.S. regulators say they still don_t have easy access to Swiss accounts. MFC Merchant Bank, which will offer the Internet accounts starting Oct.15, will never give the IRS "details on our clients unless our clients ask us to," says Vice President Peter Jessop. The Securities and Exchange Commission, meanwhile, has blocked the bank_s plans to let U.S. residents place trades through the accounts.