UBS to spill beans on 'hidden' accounts

Swiss bank UBS is to lift the veil on the country's famous banking secrecy and hand over names of account holders to the US taxman in a bid to avoid prosecution.

UBS, accused of conspiring to defraud the Internal Revenue Service, will also pay $780 million (£547 million) in penalties in the deal with the Justice Department. The US says the bank helped 17,000 Americans hide accounts from the taxman.

The authorities will drop the charges in 18 months if the bank reforms its practices, helps prosecutors and makes payments. UBS will immediately turn over names of about 250 clients.

UBS hopes that it will be able to limit the disclosures to those account holders who have been involved in fraudulent or sham offshore account structures.

The US taxman has been demanding the names of all US account holders since July.The US has faced stiff opposition from the Swiss government, eager to protect the country's hush-hush banking reputation.