American papers are full of Credit Suisse’s guilty plea to criminal charges. Our correspondent Andreas Frank looks at the real situation.  Credit Swiss was spared from going out of business by the intervention of the Swiss government with a trade-off deal and the alleged specter of an incalculable systemic risk for the world’s financial system triggered by the bank’s failure which could cause a cascading effect on other banks.

The survival of Credit Swiss was mainly the result of political deals. This could explain the Swiss government’s ostensibly mute reaction to the Credit Swiss guilty plea for aiding and abetting tax evasion.

In a press release the Swiss Federal Council concluded “that the “agreement allows the legal disputes to be resolved without a formal indictment and is binding on both parties.” “What is also particularly important is that there will be no licence withdrawals with this solution and the use of emergency legislation is not an issue.”

Finance Minister Eveline Widmer-Schlumpf said the terms of the deal were acceptable as they did not require the Swiss government to violate its national banking secrecy laws. “It is important that a solution has been found within the scope of the Swiss legal system,” she told a news conference.

As part of the deal, Credit Suisse will not have to reveal client names or put in a position where it could be forced to violate Switzerland’s bank secrecy laws. To allow that, the Swiss government would have had to pass an emergency law, Widmer-Schlumpf said.

What really happened:  Because the US can not sign treaties with Switzerland which are in violation with Swiss law, they cannot demand the names of account holders.  Nor can they explore the names of the holders of  beneficial accounts.  Switzerland has emerged as the world’s largest trading hub, although they do not have ports, have no commodity sources and do not have a large industrial base.  Why has Switzerland gone to the top of the list.  It offers a high degree of secrecy.  It offers a high degree of secrecy despite the plea of Credit Suisse.  Secretive commodities investors are amassing physical assets like oil wells, oil and gas pipelines and offshore drilling projects in the US.

It is the lack of transparency that the Credit Suisse settlement overlooked. Now the consequences of secrecy will spread, potentially causing even greater harm in the US.