GENEVA (AP) — Swiss banks have long irked German and French tax collectors. The latest battle is nothing new, except Switzerland's big neighbours now have the backing of even bigger powers — the United States and China — in the fight against tax havens.

The Swiss, stung that the Group of 20 summit of rich and developing countries included them on a watchlist of tax havens, are nonetheless confident they can meet the demands of powerful nations and still hang onto their famed banking secrecy more or less intact.

Some analysts are not so sure.

Swiss banks were slower to develop than the big lending institutions in Italy and other European countries, but by the early 1700s a dozen Geneva families had launched themselves into the business and started lending huge sums to the various war efforts of France's Louis XIV.

Some of the money was coming in directly from wealthy French families who had deposited funds in Geneva banks to evade taxes at home. Authorities in Paris caught some, but by far not all.

Although Swiss banking secrecy had been in effect already, it only became law in Switzerland in 1934, during the midst of the Great Depression.

France and Germany were stepping up their espionage to catch tax evaders, and the Swiss passed a law making it a crime punishable by jail and a fine for any bank official to divulge client information.

Historians now discredit the legend that bank secrecy was implemented to protect Jews being persecuted by the Nazis, but a major study found many Holocaust victims nonetheless benefited.

In one case a Credit Suisse employee in Basel gave the Nazi authorities information on 74 clients, who could have faced the death penalty in Germany for depositing assets abroad. The ethnicity and fate of the account holders is unknown, but a Swiss military tribunal in 1943 sentenced the bank employee to life imprisonment for breaking customer confidentiality. Now Germany and France, as well as the United States, are hot on Switzerland's case again as part of their effort to shut down tax evasion. With the support of the other G-20 countries, they had lists drawn up of tax havens and threatened to impose sanctions unless they received requested information on foreign account holders.

The Swiss and most of the other countries on the "white," "gray" and "black" lists — ranging from cooperative to uncooperative — had already started moving toward compliance with the G-20 demands, which had been well-signaled in advance.

French President Nicolas Sarkozy said when the lists were announced, "I say to my Swiss friends: it's not up to me to make the classifications. Switzerland, you are on the gray list because you have announced an intention and if you keep to it you will rise to the white list and if you don't, you'll move to the black list."

Swiss President Hans-Rudolf Merz said Friday that negotiations on the treaties needed to implement the change could begin next week. The United States and Japan are expected to be first. "However, it would be impossible" to meet the G-20's target of 12 treaties to be concluded by next November, in part because of the need to submit major treaties to national referendum under Switzerland's cherished direct democracy.

James Nason, spokesman for the Swiss Bankers Association, said Switzerland had already been cooperating with other countries in fighting money laundering and organised crime and it is now a new area — tax evasion — that is being added.

"If a country comes along with a well-founded suspicion about an identifiable person and a bank, the Swiss will accept that. What they won't accept is what we've always called 'fishing expeditions', such as asking whether a specific individual has an account in Switzerland.

"That's not good enough," said Nason. "Something must have happened. There must be concrete evidence or strong well-founded suspicions of concrete wrongdoing.

"Why on earth should states have the right of forced entry into your bank account just on the off chance of finding a little bit of tax evasion?"