The decision was made after it emerged via a recent report unveiled at the hearing that a considerable proportion of wealthy US citizens are avoiding taxes by concealing their assets in offshore accounts in Switzerland.

According to a report in the Guardian late last week, the chief financial officer for UBS Global Wealth Management and Business Banking, Mark Branson said the bank's 80,000 employees were alarmed by reports of misconduct, stating at Thursday's meeting that:

"They want to know that such misconduct does not belong in UBS and that the firm's ethics match their own.

"I am here today to tell you and to tell them that no, that kind of misconduct does not belong in UBS," he added.

It has been estimated that the US Treasury loses up to USD100bn in tax payments every year as a result of schemes designed to conceal assets from the IRS in offshore accounts.

"UBS Wealth Management Americas continues to operate as it always has and is not affected by today's announcement, except that some clients who used to have their accounts in Switzerland may transfer their accounts into that business," the bank said in a statement distributed after the hearing. Subcommittee Chairman Sen. Carl Levin, a Michigan Democrat, said he was surprised by UBS's announcement.

Mr Branson continued by stating:

“We have decided entirely to exit the business. UBS will no longer provide offshore banking or securities services to US residents through our bank branches.

“While we are winding down this business there will be no new accounts opened and Swiss-based client advisers will not be permitted to travel to the United States for the purpose of meeting with US clients," he added.

However, Branson was also keen to point out that the closure of Swiss accounts to American citizens will not affect business relation between the two countries.

UBS has also assured that it will not be naming and shaming any of those US citizens who have actively used the bank to avoid tax charges.

Mr Branson finished by explaining:

“We are working with the US Government to identify the names of US clients who may have engaged in tax fraud. Client identity is generally protected from disclosure under Swiss law. But such privacy protections do not apply when disclosure of client names is requested in connection with an investigation of tax fraud and where the requests are presented to the Swiss Government.”