Swiss parliament stalls progress of U.S. tax deal

The move gives the government less time to push through the draft law before the end of the parliament summer session on Friday. The bill is designed to allow banks to disclose data to U.S. prosecutors to help them strike deals expected to include fines that could cost the industry as much as $10 billion.

The Swiss lower house voted by a large majority not to discuss the legislation, referring the bill back to lawmakers in the upper house, which backed it last week and which could give the lower house a second chance to debate the law this week.

The protection of client information has helped to make Switzerland the world's biggest offshore financial centre, with $2 trillion in assets. But that haven has come under fire as other countries have sought to plug budget deficits by clamping down on tax evasion, with authorities probing Swiss banks in Germany and France as well as the United States.

If the lower house were to refuse to address the bill again later in the week, the bill would die, raising the spectre that the United States could indict Swiss banks.

"There is a very real danger of an escalation. Criminal charges are planned," finance minister Eveline Widmer-Schlumpf told parliament as she urged lawmakers to back the bill.

An indictment, seen as the death knell for virtually any business, earlier this year felled Wegelin & Co, which shut after pleading guilty to helping wealthy Americans evade taxes through secret accounts and paying a $58 million fine.