NEW YORK (CNNfn) - New York finance officials said Thursday the state will impose sanctions against Swiss banks in 60 days over issues of Holocaust-related accounts unless a settlement can be reached.
New York City Comptroller Alan Hevesi and State Comptroller Carl McCall said the state will gradually impose sanctions against Swiss banks unless they reach an agreement on restitution of Holocaust-era funds.
The officials detailed a plan that would include barring short-term investments with Swiss banks, banning Swiss banks and investment firms from selling city and state debt and preventing the banks from providing letters of credit.
Eventually state and city pensions funds may divest shares of Swiss companies, the comptrollers said.
The comptrollers the sanctions against short-term investments would take effect Sept. 1 if a settlement could not be reached, with additional sanctions following on Nov. 15, Jan. 1, 1999, and July 1, 1999.
"This program of actions is a last resort forced upon us by the continuing failure of the Swiss government to participate in the negotiations or even support an agreement, and by the inability of the Swiss banks to bridge the small gap between them and the class-action plaintiffs," Hevesi said.
McCall and Hevesi said they would recommend their program to other U.S. state and local financial officers.
The Swiss government has warned that sanctions would damage good relations with the United States.