As they struggle to quell the international furore over lost accounts of victims of the Holocaust, Swiss banks have been ordered to hand over records of all deposits made in New York City during the Second World War.
The demand, by the Governor of New York State, George Pataki, comes days after the three banks principally implicated in the affair, Credit Suisse, the Union Bank of Switzerland and Swiss Bank Corp, agreed to set up a $70m (pounds 43m) compensation fund for heirs of the victims. Mr Pataki is sending New York State's Banking Superintendent, Neil Levin, to Switzerland today to make the request to the directors of the three banks in person. He is acting on a suspicion that some of the assets deposited by Jews in the Nazi era may been secretly channelled to New York.
At a press conference, the Governor, flanked by the State Comptroller, Carl McCall, also said he was going ahead with measures to bar any more deposits by the state with any Swiss banks operating in America. The moves will disappoint the banks, which had hoped the opening of the compensation fund on Wednesday would defuse the dispute. They contrast with the mostly conciliatory response of the World Jewish Congress in New York, which has ended its call for a worldwide boycott of Swiss banks. Both the WJC and Alfonse D'Amato, the New York senator who has pursued his own high-profile inquiry into the fate of the victims' Nazi-era deposits, greeted the fund's creation as an important first step towards settling the affair. "We have gone from confrontation to co-operation," said Kalman Sultanik, the vice-president of the WJC in New York. Mr Levin said before he left: "We will comb every record, follow every lead regardless of where it takes us, and do everything we can do to reach the truth. …