In recent months Switzerland has been criticised for allowing dirty money to pass through its banks and financial institutions, and this latest development has been spearheaded by the Swiss banks themselves, anxious to protect their reputations. Swiss banks control around one third of the world's private banking market and UBS said the new guidelines aim to ensure “a global standard of due diligence” for banks which deal with rich clients.

In August six Swiss banks, including Credit Suisse, were reprimanded by the Swiss Banking Commission for serious shortcomings in procedures relating to the handling of funds from dubious sources. Such shortcomings were highlighted by the Abacha scandal, whereby the late Nigerian dictator and his cronies had been able to stash millions in Swiss bank vaults.

The guidelines drawn up by the 12-strong banking group and Transparency International are to be unveiled in New York, Zurich and Hong Kong, an event no doubt eagerly awaited by the Financial Action Task Force (FATF). The adoption of the rules follows increasing evidence that existing measures to combat the estimated US$590bn a year money laundering industry are ineffective, not only in offshore centres, but also in established financial centres, such as London, New York and Zurich.

Whilst UBS declined to name any of the 12 banks, among those believed to have agreed to the new code on money laundering are UBS itself, Credit Suisse, Citigroup Barclays, the UK's HSBC, Deutsche Bank, Societe Generale of France, ABN Amro of the Netherlands and Banco Santander Central Hispano of Spain.