The Swiss government on Wednesday intervened in the stand-off between its banking giant UBS and the US authorities concerning access to information on US tax evaders, by saying it would forbid the bank from handing over confidential client information, if a court case next week required it. Switzerland is synonymous with discreet banking but 75 years after Swiss banking secrecy was enshrined in law, the practice is under massive international pressure. Banking secrecy obliges banks to keep information about their clients confidential, except in cases of criminal investigation. But what happens when a crime in one country is not recognised as such in Switzerland, as is the case with tax evasion?

UBS is refusing to release data on 52,000 Americans, holders of Swiss bank accounts, to US tax authorities, who accuse them of tax evasion.

Switzerland's largest bank, UBS faces a court hearing in Miami on July 13th.

In a case brought under civil law, it stands accused by the US of hiding close to $15bn in assets in secret accounts.

While the Swiss government is not directly involved, it is represented as a “friend of the court.” In a filing revealed Wednesday, the government warned it would issue a blocking order and, if necessary, confiscate all relevant material, to prevent UBS from complying, should the Miami court side with the US authorities.

“The enforcement of the summons would require UBS to violate Swiss law,” it said.

Last February, there was outrage in Switzerland when UBS agreed to pay $780m to settle a separate, but linked, criminal action by the US authorities and disclose 255 US client names. However, a civil case requiring the bank to reveal up to 52,000 client identities remained open, resulting in next week’s hearings.

Switzerland has prospered for centuries on crimes committed beyond its borders. However, in recent decades, it has been forced to agree to disclosures on the proceeds of plundering by various dictators and the reputation of Swiss banking was tarnished by revelations that the banks had looted the unclaimed wealth of Nazi Holocaust victims.

Geneva, the Calvinist city that centuries ago had attracted wealthy French families fleeing the revolution, is dominated by about 140 private banks, accounting for almost one in five of jobs in a city of 180,000 people.

Bruno Gurtner, Chair of the Global Board, of the Swiss Tax Justice Network, in a letter to the Financial Times in March, disputed the claim that Swiss secrecy laws “date back to 1934, when they were enacted partly to protect German Jews and trade unionists from the Nazis”.

Gurtner said: "This is a big myth. The argument about it being set up to protect Jewish money first appeared in the November 1966 Bulletin of the Schweizerische Kreditanstalt (today Credit Suisse). The main reason bank secrecy was strengthened in 1934 was a scandal two years earlier, when the Basler Handelsbank was caught 'in flagrante' facilitating tax evasion by members of French high society, among them two bishops, several generals, and the owners of Le Figaro and Le Matin newspapers. Before that, there was professional secrecy (such as exists between doctors and their patients), and violation was a civil offence, not a criminal one as it is today. Swiss bank secrecy has always been an effective way to attract foreign money.

Many Swiss people are delighted that our country is going to stop blocking the exchange of information with other jurisdictions and will now follow Organisation for Economic Co-operation and Development standards. For Switzerland this is a huge step. Other important steps must follow, to tackle other loopholes in the offshore world, such as those provided by British trusts and by other damaging facilities offered in Britain’s Crown Dependencies."