Banking: Scandal in Basel

Clubby and conservative, Swiss bankers have been increasingly irked by the aggressive marketing methods of U.S. banks that have flocked to their country and heavily tapped the local money market. Thus Swiss moneymen reacted with scarcely concealed delight when the Basel subsidiary of the United California Bank suspended operations, a victim of the costliest banking scandal in Swiss history. The losses of the U.S. affiliate so far have been estimated at $40 million. But as state-appointed auditors worked to unravel the tangled affair last week, there was every possibility that the deficit could grow even larger.

Officials of the Los...

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