>>> What to look at today - 30th of December 2016

Dow-0.07% S&P-0.03% Nasdaq -0.12% Russell +0.17%
US Mkt closed slightly lower. Five cyclical sectors ended in negative territory, which overshadowed solid gains among lightly-weighted countercyclical groups like utilities (+1.3%), real estate (+0.9%), and telecom services (+0.4%). To be fair, the influential health care sector (+0.1%) also registered a modest gain, but biotechnology could not keep up. Energy (-0.2%) retreated amid a 0.6% decline in crude oil, which slid to $53.74/bbl after yesterday's bearish reading of the API inventory report was confirmed by today's data from the EIA. Financials underperformed also. Volume remained lights wit less than 700mil shares traded. US After Hours MYL +2% on generic Concerta launch news... INNL down nearly 50% after FDA rejected its XARACOLL application. Nikkei225 underperforms yet again as profit-taking in USD/JPY continues; USD falls to 2-week lows against JPY and EUR - the move against the latter particularly abrupt with about a 150pip spike to 1.0650 during the most illiquid early part of the Asia session. No specific catalysts for the move cited by dealers outside of algo-driven buying. China regulators called for tighter criteria on investment in insurers. local press also speculated the govt could further raise coal and steel capacity reduction goals by 10% in 2017 after completing initial 2016 targets ahead of schedule. Toshiba bounced after about a 40% plunge this week; Nomura says the US nuclear ops writedown is priced in.

Nikkei -0.16% Hang Seng +0.96% CSI +0.36% +0.25%

Eur$ 1.0533 CNH 6.9732 CNY 6.95 JPY 116.81 GBP 1.2275 CHF 1.0193 RUB$60.6020 WTI$ 54.02 +0.46%

S&P +0.23% EuroStoxx +0.03% FTSE -0.02% Dax +0.10% SMI +0.11%


Macro :
- Italy Wins EU Nod to Extend Bank Liquidity Program
- Italy Antitrust Chief Urges EU States to Combat Fake News: FT
- U.K. to Ask for Central Role in Europol After Brexit: Telegraph
- French Court Bans ‘Google Tax’ Measure on Diverted Profits

Keep an eye on :
- ATLN VX : J&J Said to Discuss Breakup of Actelion in Acquisition: Reuters
- DBK GY : Deutsche Bank Robo-Adviser Has Fewer Than 100 Customers: Spiegel
- DNB NO : DNB CEO Bjerke Says Consumer Debt Growth Rate Unhealthy: DN
- ENI IM : Eni Shuts Goliat Production After Damage to Offloading Hose
- FCA IM : Fiat Said to Be Developing Autonomous Vehicle: The Information
- FCT IM : Vard Rises Back to Fincantieri’s Delisting Price on Extension
- HMSO LN : Hammerson Sells 50% of Watermark Development to GIC for GBP48.5m
- MYL US : Mylan Rises Post-Market on U.S. Release of Generic Concerta
- RBS LN : RBS Shareholders Urge Bank to Create Investor Committee: FT
- REP SM : Repsol in Talks to Sell Algeria Well Stake: El Economista
- ROG VX : Roche Gene-Sequencing Acquisition Founder Accused in Patent Suit
- SCYR SM : Sabadell Becomes Sacyr Shareholder With 2.37% Stake: Expansion
- TEC FP : Technip, Venezuelan Firms Picked for Aruba Refinery Job: Reuters

>>> US After Hours Summary: MYL +2% on generic Concerta launch news...


After Hours Summary: MYL +2% on generic Concerta launch news... INNL down nearly 50% after FDA rejected its XARACOLL application

After Hours Gainers:

  • MYL +2.2% (launches generic version of Janssen's Concerta tablets)
  • NVDA +1.2 (edging higher in extended trade after recouping early losses and closing near highs)
  • AG +1.2%, MBLY +1.0% (continued strength)

After Hours Losers:

  • INNL -49.2% (light volume; Innocoll received FDA Refusal to File letter for XARACOLL - its product candidate for postsurgical pain treatment)
  • GEVO -8.6% (announces 1-for-20 reverse stock split)

>>> Asian Update

Asia Mid-Session Market Update: USD craters to 2-week lows against EUR and JPY while Gold adds to gains; China's NDRC said to loosen investment curbs on banking

***US Session Highlights***
- (US) NOV ADVANCE GOODS TRADE BALANCE: -$65.3B V -$61.6BE
- (US) NOV PRELIMINARY WHOLESALE INVENTORIES M/M: 0.9% V 0.2%E
- (US) Nevada reports Nov casino gaming Rev $930.4M, -1.5% y/y; Las Vegas strip rev $517M, -3.5% y/y
- (US) 7-Year Treasury $28 billion auction average yield 2.284%, prior 2.215%, Bid-To-Cover ratio: 2.54 V 2.68 prior and 2.50 average over last 12 auctions.

***US markets on close: Dow -0.1%, S&P500 flat, Nasdaq -0.1%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Financials
- Biggest gainers: NEM +7.6%; DLR +2.5%; ETR +2.1%
- Biggest losers: CMG -2.3%; MU -2.2%; CFG -2.0
- At the close: VIX 13.4 (+0.4pts); Treasuries: 2-yr 1.22% (-3bps), 10-yr 2.48% (-3bps), 30-yr 3.08% (flat)

***US movers afterhours***
- MYL: Launches generic Concerta (methylphenidate) tablets; +2.2% afterhours
- NVDA: TheStreet.com defends NVDA with analysis of Citron claims; +1.7% afterhours
- GEVO: Announces 1-for-20 reverse stock split, effective Jan 5th; -8.5% afterhours
- INNL: Receives refusal to file letter from FDA for Xaracoll (bupivacaine HCl collagen-matrix implants) New Drug Application; -49.7% afterhours

***Key economic data***
- (KR) SOUTH KOREA DEC CPI M/M: 0.1% V 0.2%E; Y/Y: 1.3% V 1.3%E; CPI CORE Y/Y: 1.2% V 1.4%E
- (AU) AUSTRALIA NOV PRIVATE SECTOR CREDIT M/M: 0.5% V 0.5%E; Y/Y: 5.4% V 5.4%E
- (TH) Thailand Dec PMI Manufacturing: 50.6 v 48.2 prior; first expansion since April

***Asia Session Notable Observations, Speakers and Press***
- Nikkei225 underperforms yet again as profit-taking in USD/JPY continues; USD falls to 2-week lows against JPY and EUR - the move against the latter particularly abrupt with about a 150pip spike to 1.0650 during the most illiquid early part of the Asia session. No specific catalysts for the move cited by dealers outside of algo-driven buying.
- New Zealand and Australia main indices end the day early, finishing 2016 up 9% and 7% respectively.
- Economic data were primarily 2nd tier, not yielding any meaningful market impact. South Korea CPI y/y was in line w/ consensus at 1.3%, but below BOK's 2% target for 38th consecutive month.
- China regulators called for tighter criteria on investment in insurers, while state planner NDRC said govt would loosen foreign investment curbs in banking. Ahead of the open, local press also speculated the govt could further raise coal and steel capacity reduction goals by 10% in 2017 after completing initial 2016 targets ahead of schedule.
- Toshiba bounced after about a 40% plunge this week; Nomura says the US nuclear ops writedown is priced in.

China:
- (CN) China Insurance Regulatory Commission (CIRC) proposes to tighten rules on investment stakes in insurers - financial press
- (CN) China State Planner (NDRC) official: China to loosen foreign investment curbs in banking sector
- (CN) PBoC requests banks to report yuan trading over CNY50K vs CNY200K previously; effective July 1st 2017
- (CN) SocGen chief China economist: China State Council may abandon 6.5% GDP growth target by 2018 to curb asset bubbles and financial leverage - press
- (CN) China reportedly could raise coal and steel capacity reduction goals by 10% in 2017 - Chinese press

Japan:
- (JP) Japan 2016 vehicle sales seen at 4.97M units, -2% y/y and a 5-year low - Nikkei
- (JP) Japan PM Abe's cabinet approval rating rose 6pts to 64% (38-month high) following his joint visit with US Pres Obama to Pearl Harbor - Nikkei

Australia:
- (AU) NAB co-head of FX strategy: There is a chance that US interest rates will exceed those of Australia in 2017, but the effects on AUD exchange rate may be less severe; today's stronger terms of trade implies "a significantly higher level" - AFR

***Asian Equity Indices/Futures (23:30ET)***
- Nikkei225 +0.1%, Hang Seng +1.0%, Shanghai Composite +0.1%, ASX200 -0.6%, Kospi closed
- Equity Futures: S&P500 +0.2%, Nasdaq +0.3%, Dax +0.1%, FTSE100 +0.2%

***FX ranges/Commodities/Fixed Income (23:30ET)***
- EUR 1.0485-1.0650; JPY 116.05-116.90; AUD 0.7215-0.7245; NZD 0.6950-0.6980
- Feb Gold +0.2% at 1,161/oz; Feb Crude Oil +0.3% at $53.94/brl; Mar Copper +0.5% at $2.50/lb
- (CN) China MOF sells 91-day bonds, avg yield 2.674%
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.9370 V 6.9497 PRIOR; strongest Yuan fix since Dec 19th
- (CN) PBOC to inject CNY160B in 7-day reverse repos, CNY90B in 14-day reverse repos; For the week, drains CNY245B v CNY375B injection in prior week

***Asia equities / Notables / movers by sector***
- Consumer discretionary: Adastria Holdings Co 2685.JP -8.3% (9-month result); Aeon Mall Co.8905.JP -1.9% (9-month result speculation)
- Financials: Wynn Macau 1128.HK +3.3%, Melco International Development 200.HK +5.2% (ahead of Macau Dec revenue data)
- Industrials: China Green Holdings 904.HK +1.1% (H1 result); Takata Corp.7312.JP +21.2% (settlement speculation momentum)
- Technology: Toshiba Corporation 6502.JP +9.9% (Nomura positive note); Inventec Corp 2356.TW +3.0% (benefits from popularity of AirPods)
- Materials: Sandfire Resources SFR.AU -1.2% (management changes); Newcrest NCM.AU +5.1%, Northern Star NST.AU +4.0%, Evolution EVN.AU +9.8%, St Barbara SBM.AU +10.6% (Gold price rises); China Minmetals Resources 1208.HK +2.1% (asset sale)
- Healthcare: Yunnan Baiyao Group Co 000538.CN +10.0% (new investment plan)

>>> US Close Dow-0.07% S&P-0.03% Nasdaq -0.12% Russell +0.17%


Closing Market Summary: Stocks Inch Lower With One Session Left in 2016

The stock market ended Thursday on a slightly lower note after spending the day inside a narrow range. The S&P 500 ended just below its flat line while the Nasdaq (-0.1%) underperformed throughout the session.

Equity indices displayed some strength at the start, but the opening rally fizzled out shortly after taking shape. The S&P 500 returned to its flat line just 30 minutes after the open and remained near that mark into the afternoon.

Five cyclical sectors ended in negative territory, which overshadowed solid gains among lightly-weighted countercyclical groups like utilities (+1.3%), real estate (+0.9%), and telecom services (+0.4%). To be fair, the influential health care sector (+0.1%) also registered a modest gain, but biotechnology could not keep up.

The iShares Nasdaq Biotechnology ETF (IBB 267.11, -0.97) lost 0.4%, contributing to the relative weakness in the Nasdaq. The top-weighted technology sector (-0.04%) also lagged throughout the day amid weakness in chipmakers. However, the PHLX Semiconductor Index and the tech sector returned to unchanged by the close.

Elsewhere among cyclical sectors, energy (-0.2%) retreated amid a 0.6% decline in crude oil, which slid to $53.74/bbl after yesterday's bearish reading of the API inventory report was confirmed by today's data from the EIA.

The financial sector (-0.7%) also underperformed into the afternoon with the likes of Bank of America (BAC 22.00, -0.33), Citigroup (C 59.38, -0.66), and JPMorgan Chase (JPM 85.89, -0.61) surrendering between 0.7% and 1.4%.

Treasuries registered their second consecutive day of gains, sending the 10-yr yield lower by three basis points to 2.48%. The U.S. Dollar Index (102.70, -0.60) responded to the downtick in the benchmark yield, falling 0.6%.

Both the dollar and Treasuries spent the afternoon inside narrow ranges, seeing little reaction to an executive order from President Obama, calling for 35 Russian diplomats to be expelled from the US. The executive order also sanctioned five entities and six individuals for alleged interference in the 2016 election.

Investor participation remained light with fewer than 700 million shares changing hands at the NYSE floor.

Economic data included initial claims and international trade in goods:

  • The initial claims report for the week ending December 24 showed claims decreasing 10,000 to 265,000 (consensus 263,000)
    • There were no special factors driving that reading, which remained below 300,000 for the 95th consecutive week and kept the four-week moving average of 263,000 near a 43-year low
    • Continuing claims for the week ending December 17 increased 62,000 to 2.102 million. The four-week moving average for this series was 2.042 million, up slightly from the prior week.
  • November International Trade in Goods showed a deficit of $65.30 billion to follow last month's deficit of $61.90 billion (from $62.00 billion)

Tomorrow's economic data will be limited to the 9:45 ET release of Chicago PMI for December (consensus 55.2).

  • Russell 2000 +19.9% YTD
  • Dow Jones Industrial Average +13.7% YTD
  • S&P 500 +10.1% YTD
  • Nasdaq Composite +8.5% YTD

FT : Italian finance minister attacks ‘rigid’ European Central Bank

Italian finance minister attacks ‘rigid’ European Central Bank
Criticism follows central bank’s calculation that MPS needs €8.8bn of fresh capital

Italy’s finance minister has attacked the European Central Bank for being “rigid” and “opaque” in its calculation of the capital shortfall at Monte dei Paschi di Siena, exposing tensions over the rescue of Italy’s third-largest bank.

On Monday, the ECB unexpectedly told Italian officials that MPS would require €8.8bn in new capital. That figure was significantly higher than the €5bn target that the Italian bank had been seeking in recent months in the wake of Europe-wide stress tests in July.

The ECB’s calculation means that Italy will have to plough more taxpayer money than expected into MPS as part of a government bailout that will hurt the country’s public finances and risks damaging the centre-left government led by Prime Minister Paolo Gentiloni.

“The ECB opted for a very rigid approach both in terms of timing and risk valuation, which led to a request for €8.8bn of fresh capital,” Pier Carlo Padoan, Italy’s finance minister, said in an interview with Il Sole 24 Ore, the financial daily on Thursday. “[This] will make MPS an excessively capitalised bank,” he added.

Mr Padoan also took aim at Frankfurt for its non-transparent methodology. “An explanation of how we got to €8.8bn would clarify the approach of the authority, helping other private banks make the right decisions when they ask for the ECB to approve any deal under its supervision,” the finance minister said. “Opaque moves without an explanation lead people to think there’s something wrong behind it.”

The ECB did not immediately respond to a request for comment on Mr Padoan’s remarks.

The tensions with Frankfurt came as Mr Gentiloni, in a year-end press conference in Rome, warned that the clean-up of the Italian banking system would be a cumbersome process, even after last week’s move by the government to set aside €20bn to help recapitalise struggling institutions.

“The implementation will be long and complicated, we cannot hide that. But this decision was taken and it is strategic and fundamental,” said Mr Gentiloni. “There will be an exchange with European regulators, I hope it will be a productive and effective debate, otherwise it will be a difficult discussion”.

About €6.5bn of the €20bn fund is expected to be used on MPS, Italian officials said following Monday’s ECB decision. But Mr Padoan said that the final figure would be based on MPS’s new business plan, which will take about two or three months to draft.

The struggles of Italian banks have not only weighed on the eurozone’s third-largest economy in recent years, stunting its recovery, but have also been a growing source of popular discontent with the government, fuelling the anti-establishment opposition. Mr Gentiloni became prime minister this month replacing Matteo Renzi, who resigned after nearly three years in office after suffering a heavy defeat in a constitutional reform referendum.

Mr Renzi declined to use public funds to recapitalise MPS in July, with the bank attempting to raise €5bn from private investors instead. That effort failed this month, forcing Italy to step in, and raising questions about whether it would have been wiser and less expensive to intervene earlier.

But Mr Padoan said he had no “regrets” about pushing a “market transaction”. “It would have been the best option, avoiding the problems we now face. Whoever wrote that we could have done this earlier sees things differently from me,” he added.

Over the past month, however, MPS’ liquidity position has suffered a “steep deterioration”, according to the ECB, as customers have been withdrawing money from their accounts or shutting them amid waning confidence in the bank. Italian officials hope that the government intervention will help reassure customers that MPS is safe.

People close to situation say the ECB’s calculation was partly based on the deteriorating shape of MPS’s balance sheet, and partly on the need to create an extra cushion for the bank in light of its troubles.

EXCLUSIVE-J&J discussing breaking up Actelion in an acquisition -sources

EXCLUSIVE-J&J discussing breaking up Actelion in an acquisition -sources
1 Min AgoReuters
Dec 29 (Reuters) - Johnson & Johnson is negotiating a deal to acquire Swiss biotechnology company Actelion Ltd that would separate its commercialized portfolio from its research and development (R&D) assets, people familiar with the matter said on Thursday.
This deal structure would allow J&J to acquire Actelion with a cash offer in the region of $260 per share, a little more than what it had offered when it walked away from negotiations earlier this month, while allowing Actelion shareholders to benefit further financially from Actelion's R&D pipeline, the people said.
Under the deal being discussed, Actelion's R&D pipeline would be placed in a new publicly traded company, the people said. The exact ownership of this new company, and whether Actelion Chief Executive Jean-Paul Clozel would head that new company, are among the details still being negotiated, the people said.

A deal could be finalized by late January, the people said, cautioning that negotiations could still end without a deal and asking not to be identified because the details are confidential.
J&J and Actelion declined to comment.

FT : Chinese M&A boom faces regulatory checks

Chinese M&A boom faces regulatory checks
Record dealmaking in 2016 has raised concerns from regulators in China and overseas


HNA closed its $6.5bn buyout of software distributor Ingram Micro in December, putting it in control of the US’s 64th-largest company by revenues. A few months earlier, the conglomerate, with holdings in insurance, airlines and department stores, agreed to pay about $6.5bn for a 25 per cent stake in Hilton Worldwide Holdings, which is 254th on the list of the biggest companies in the US.

Aggressively acquisitive groups such as HNA helped China dominate cross-border dealmaking in 2016. Companies from the country agreed $220.4bn in acquisitions, or about 16 per cent of global cross border activity, according to data from Thomson Reuters.

But the record figures for China, slightly more than double the volume of deals last year, have also sparked a fierce backlash from regulators in both foreign markets and at home.

As regulatory reviews for many of the deals struck in 2016 extend into the new year — ChemChina’s $44bn takeover of Swiss agrochemical group Syngenta, China’s largest-ever cross-border takeover, included — questions have emerged over what kind of Chinese groups will succeed in swallowing up foreign assets in 2017.

“The whole architecture and lens through which we evaluate Chinese buyers changed during 2016,” says Colin Banfield, joint head of global cross-border mergers and acquisitions at Citi.

“Previously, the test was predicated on whether the Chinese buyer could get the deal signed up under competitive dynamics. Now, the test is whether post signing, they can actually make it to the finish line given heightened regulatory hurdles in the target markets and foreign exchange restrictions.”

Regulators around the world have come down hard on Chinese investment this year, often citing vague national security concerns.

The Australian Treasury, for example, said in August that China’s State Grid would not be allowed to take over Ausgrid for $7.5bn. Deals inked in Germany, the Netherlands and Norway were upended this year by the Committee on Foreign Investment in the US on grounds that the national assets involved in the acquisitions presented risks to US security.

One of those failed buyouts was that of troubled German chipmaker Aixtron by a Chinese investor group for €670m, which US President Barack Obama blocked over national security concerns. A consortium of Chinese investors aiming to buy a lighting unit from Philips for $3bn received similar treatment at the start of the year.

The Chinese government has protested that the blocking of deals was protectionism. However, in the final months of 2016, China’s own foreign exchange regulator has become one of the biggest hurdles for Chinese groups seeking to buy businesses overseas.

Fearing cross-border M&A has been used by Chinese groups to move capital offshore, the State Administration for Foreign Exchange (Safe) has signalled that it will crack down on acquisitions it deems speculative in nature. “Strategic” acquisitions, or ones that have synergies with the buyer’s business at home, will be allowed.

“The approval process in China has become longer, more complicated, with more questions,” says Philip Li, partner at Freshfields Bruckhaus Deringer, noting that gaining approval from Safe now takes four to six months, compared to two to three months at the beginning of the year.

Guidelines from Beijing regarding future dealmaking have so far been ambiguous. In late December, the Ministry of Commerce said it was monitoring closely all cross-border deals involving the purchase of land, hotels, film production and entertainment assets.

Several of this year’s biggest deals — and which lack obvious connections to the buyers’ original businesses in China — fall in this area.

Dalian Wanda, the property developer that also owns yachtmaker Sunseeker and the AMC cinema chain, agreed to pay about $1bn for Dick Clark Productions, the US company behind the Golden Globe Awards, and $3.5bn for Legendary Entertainment, which has financed blockbuster films such as The Dark Knight.

The year’s biggest failed deal was Anbang Insurance’s attempted $14bn takeover of Starwood Hotels & Resorts, which ended with China’s regulators quietly blocking the transaction.

HNA’s buying spree has also included billions of dollars in hotel assets, including Hilton Worldwide, Carlson Hotels and Red Lion Hotels Corp.

Similar deals will probably go forward in 2017, bankers say. But the state is set to have a bigger role in deciding what types of acquisitions will be allowed to progress, and which companies can pursue them.

“Strategic deals will go ahead. But not just deals that are strategic for the company, deals that are strategic for China Inc,” says Apoorva Shah, co-head of M&A in Asia ex-Japan at Nomura.

FT : UK mobile users face return of steep roaming bills after Brexit

UK mobile users face return of steep roaming bills after Brexit
Negotiating a trade deal to cover roaming will be delicate task, warns industry

British mobile phone users face bills of up to €50 for each song they stream while roaming in the EU, unless the UK can agree a comprehensive free-trade deal after Brexit.

The EU has campaigned against roaming fees over the past decade, reducing what operators can charge ahead of an eventual abolition for nearly all users from next summer. The reforms were repeatedly hailed by former prime minister David Cameron during the Brexit referendum.

But Britain will not be covered by these rules once it quits the bloc, allowing continental carriers to charge British consumers what they like — and potentially leaving consumers with the bills of €10 per MB that are commonly paid by US and Swiss visitors who do not arrange special data packages.

“That is the risk,” said one EU official working on roaming charges.

The return of “bill shock” — the surprisingly large charge from your phone company after a trip abroad — will be more pronounced now that people use their phones for more than just talking and texting.

For example, listening to a song on Spotify takes between 3MB and 5MB, which would leave non-EU customers with a bill of up to €50.

UK networks fear that rival telecoms companies in the EU could raise wholesale prices for calls and data. One telecoms executive told the Financial Times that it is preparing for a “worse case scenario”, in which these higher charges were not covered entirely by roaming charges, but would spill over into higher line rental or other fees across the whole network. “We could be exposed to the likes of France and Spain raising prices,” he said.

A quick bilateral deal between the UK and the EU to cover roaming is not possible, according to the European Commission. In a response to a question on the topic last year, Günther Oettinger, the German commissioner responsible for the bloc’s telecoms policy, said that “there are obvious constraints”.

Under WTO rules, any bilateral agreement outside of a comprehensive free-trade deal would have to be extended to all other WTO members, warned Mr Oettinger in a response to the European Parliament last year.

Negotiating roaming rights as part of any free-trade deal will be delicate, warned industry experts and officials.

Countries that receive huge numbers of British tourists may be unwilling to offer generous terms to the UK, largely because tourist traffic — and subsequent congestion on networks — is tilted in one direction.

While 13m British people visited Spain last year, far fewer Spanish travelled the other way. It took a decade of negotiations to persuade countries such as Italy and Spain to sign off on the EU’s current limits on roaming fees, warned officials.

Instead, operators would have to forge their own bilateral deals with other phone companies across Europe. During these talks companies that operate their own networks in the UK, such as Vodafone and Three, would be able to exchange access to their own infrastructure with continental peers. This would potentially make negotiations straightforward, according to officials.

Smaller “virtual operators”, who do not own infrastructure and piggyback on the networks of larger rivals, such as TalkTalk and Sky, have no such leverage and would be unlikely to be offered generous terms, leaving their customers facing potentially huge price hikes, warned one official.

Talks between operators have been relatively straightforward in recent years as the EU has capped what they can charge each other, leaving little incentive to drive a hard bargain.

FT : Switzerland moves further to end bank secrecy

Switzerland moves further to end bank secrecy
Planned deal with US underlines shift away from reputation as tax haven

Switzerland wants to update a tax deal with the US next year to allow the automatic, two-way exchange of information about bank accounts between the two countries, a senior official in Bern has said.

The move shows the scale of the rethink on bank secrecy in Switzerland, once famous for helping tax evasion. In a series of high-profile cases, Swiss banks have had to pay billions of dollars in US fines over the past decade after helping clients sidestep tax authorities.

Bern wants to end the country’s reputation as a haven for illicit money and has signed a string of agreements with other countries on the automatic exchange of information. The accords take effect in January.

Implementing globally-agreed standards was “very important for the reputation, competitiveness and integrity of our financial centre — and it is also a factor creating legal certainty”, Fabrice Filliez, deputy head of tax at the Swiss international finance department, told the Financial Times.

Switzerland is the world’s largest centre for cross-border private client wealth management. In recent years, its banks have had to overhaul business models to ensure their clients are fully tax compliant.

US authorities can already receive information automatically about Swiss bank accounts under the US Foreign Account Tax Compliance Act of 2010. But Mr Filliez said Bern wanted to follow other European countries in agreeing arrangements that would permit reciprocal exchange of information.

Such agreements would also allow Swiss authorities access to information on whether Swiss tax had been evaded on money in US bank accounts. “It is a matter of principle and international equality,” said Mr Filliez. “When you commit to something you want your partners to commit to something similar.”

Mr Filliez described the negotiations with the US as “technical” rather than political. If a deal were struck in 2017, legislation would have to be approved in the Swiss parliament the following year before the exchange of information could start.

Swiss bankers privately complain that the US authorities have failed to act aggressively enough to increase transparency in their domestic financial system, allowing exploitation of complex structures, shell corporations and trusts. Mr Filliez said Washington was “fully aware of the problem and trying to make it better”.

His comments came as Switzerland prepares to start implementing agreements on the automatic exchange of information struck with 38 countries, including the 28 members of the EU. Switzerland is not an EU member.

From January 1, information will be collected for authorities in the relevant countries, before being exchanged in 2018.

Switzerland said this month that it had begun consultations on similar agreements with more than 20 other countries including India, Israel and Argentina. The automatic exchange of information builds on governments’ efforts since the global financial crisis of 2008 to boost revenues by ensuring tax compliance.

Mr Filliez said the turning point in Swiss attitudes towards secrecy had been in 2009, when the country agreed to accept international standards on the exchange of information by request.

Switzerland had been slower than other European countries in agreeing such deals. Mr Filliez admitted. He said this reflected Switzerland’s slow-moving, consensus-orientated decision-making, which often ends up with issues being voted on in referendums. “Keeping that in mind, Switzerland has made tremendous progress,” he said.

This year, Switzerland was declared “largely compliant” by the Global Forum on Transparency and Exchange of Information for Tax Purposes.