Swiss min: Must tackle problem of tax dodgers-paper

ZURICH, Jan 28 (Reuters) - Switzerland must tackle the problem of untaxed money in secret accounts and also must ensure the central bank does not become a political pawn, the country's economy minister was quoted as saying on Saturday.

A raft of Swiss banks have come into the crosshairs of tax officials in the United States, Germany and other countries. UBS agreed in 2009 to hand over names of more than 4,000 of its account holders and pay a $780 million fine to settle charges it helped Americans dodge taxes.

The Swiss government has signed agreements with Germany and Great Britain to resolve the problem of citizens of those countries hiding their money in secret Alpine accounts. Swiss an U.S. officials are still conducting negotiations.

Wegelin, Switzerland's oldest bank, broke itself up on Friday, buckling under the pressure of the long-running U.S. campaign.

Swiss finance minister Eveline Widmer-Schlumpf is hoping for a deal with the United States this year and said progress had been made at the World Economic Forum in Davos this week.

'The problem of untaxed wealth in Switzerland is a serious problem that we need to resolve. Not only with the USA but also with the Europeans,' Economy Minister Johann Schneider-Amman, of the pro-business Free Democrats (FDP) party, told the German-language Tages-Anzeiger in an interview.

'Banking secrecy wasn't invented to create an opportunity for doing business with untaxed money,' he also said. 'We must find a way of dealing with legacy wealth.'

CENTRAL BANK ATTACK

The head of the Swiss National Bank stepped down earlier this month due to an uproar over a currency trade made by Chairman Philipp Hildebrand's wife just a few weeks before the SNB set a cap on the franc.

The information on Hildebrand's account transactions illegally found its way into the hands of his political adversary Christoph Blocher, mastermind of the powerful right-wing Swiss People's Party (SVP). He then handed the details on to the multi-party government.

The right-wing magazine Weltwoche, usually regarded as Blocher's unofficial mouthpiece, ran a big spread on the controversial currency trade.

In the interview, Schneider-Ammann warned of politicizing the central bank, which set a cap of 1.20 per euro on the safe-haven franc on Sept. 6.

'The attackers were keen on gaining control over the national bank,' he said. 'Therefore the Hildebrand case is a wake up call for democracy. We must ensure that democratic forces play a fair game.'

The economy minister also said the pace of naming a new member to the SNB's three-person governing board was up to the SNB's supervisory council. Once supervisors had made a recommendation to the government, it would decide, Schneider-Ammann said.

IMF SUPPORT

Switzerland boosted its support to the International Monetary Fund last year, a move that proved highly contentious among some right-of-centre politicians.

There have been rumours the IMF has of late asked Switzerland for additional support as worries about peripheral sovereign debts continue to plague the euro zone. Swiss officials, however, officials have said no concrete requests for further aid have been received.

'About a quarter of our funds have been put to use: A large portion is still available for future use. That should be used up, then the structural reforms have to take effect -- and only then we can discuss if Switzerland will offer up more money,' Schneider-Ammann said.

(Reporting by Catherine Bosley; Editing by Toby Chopra) Keywords: SWISS ECONOMY/

(catherine.bosley@thomsonreuters.com)(+41 58 306 7461)

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