The reason for the Swiss cave-in was obvious: U.S. state and local sanctions were due to take effect on September 1, and the wider Swiss business community was beginning to feel the heat. "The settlement also undermines the Swiss claim to have acted morally in this matter," says Zagorin. "They stonewalled throughout the process, and it was only the threat to their commercial interests that forced them to settle. People will draw their own conclusions from that."
Swiss banks have agreed to pay out $1.25 billion to Holocaust survivors, but that's unlikely to rescue their reputation. "This agreement shows that the Swiss banks were posturing and weren't serious in the negotiations," says TIME correspondent Adam Zagorin. "After their initial $600 million offer was rejected in June, they insisted they wouldn't offer another dime, citing public outrage in Switzerland and even accusing the claimants of fomenting anti-Semitism. Then, a few weeks later they go and double their offer."