Have Credit Suisse and UBS violated Russian sanctions? The question is so sensitive that even a mere suspicion can have serious consequences. The sharp decline in UBS stocks on the last Wednesday in September underscores this more vividly than any words.

Minutes after the news agency Bloomberg reported an investigation by the U.S. Department of Justice (DoJ) into UBS subsidiary Credit Suisse and UBS on that day, the bank's shares lost more than 7% of their value on the stock market. The reaction reflects the investors' fear of draconian fines, a method the U.S. justice system has consistently used to command respect, not only from Swiss banks.

A significant portion of the over 5 billion Swiss francs in shareholder value that was wiped out has not been recovered to this day. All that, despite UBS having since denied the 'recent reports about an alleged investigation by the U.S. Department of Justice (...).'

The desired effect of the dementi largely failed, partly due to the extended period the bank took to respond. Three whole days passed after the Bloomberg report was published before UBS issued the brief statement.

Both the Börsen-Zeitung and 'Finanz und Wirtschaft' expressed skepticism about the 'peculiar' denial. The Swiss newspaper asked UBS whether a counterstatement had been requested from Bloomberg, a standard practice in such cases. The bank, however, left this query unanswered.

Evidently, UBS intended to challenge the credibility of the Bloomberg report with its statement, without being able to refute its contents with solid arguments. There is only one section in the report that could be worth dispelling for both UBS and the DoJ. Bloomberg, citing well-informed sources, states: 'Investigators have taken requests for information to UBS directly, rather than routing through official diplomatic channels, which can be slower.'

Such an approach by the U.S. justice department would constitute a breach of the bilateral treaty on mutual legal assistance in criminal matters, which was signed 50 years ago between the U.S. and Switzerland.

Breaking a contract between two long-standing partners is audacious, to say the least. In this case, the actions of the U.S. justice department would not only be audacious but also unfair. The DoJ knows that it cannot force Swiss banks to disclose information directly, bypassing legal processes. However, it also knows that banks like UBS, conducting substantial business in the U.S., find it difficult to oppose the demands of American authorities.

Recently, UBS, through the Swiss Bankers Association, publicly called for a change in Switzerland's traditional policy of neutrality, advocating the country's inclusion in the G7 task force 'Russian Elites, Proxies, and Oligarchs.' It seems likely that the bank hopes this move will lead to a more relaxed relationship with U.S. authorities.

Banks, however, should not be forced to engage in political maneuvering. Yielding to the demands of the U.S. justice department would risk UBS violating Swiss law. In light of this, neither UBS nor the DoJ are likely interested in clarifying the background of the mysterious denial or contributing to it.

Nonetheless, the Swiss government should seek clarification. After all, it concerns not only the credibility of the Swiss legal system but also a crucial factor for companies like UBS – the rule of law.