UBS must hand over details on some 40,000 of its French clients to Paris tax authorities seeking to combat tax evasion by its citizens, Switzerland’s highest court has ruled.

At the same, a new industry survey shows that more than 50 percent of small Swiss private banks posted losses last year.

Both developments are closely linked to the role by Swiss private banking in accommodating tax evasion by people around the world.  That, coupled with overall tougher regulation, heightened oversight, the cost of doing business in a competitive market, coupled with stock market volatility, has left the Swiss wealth industr...