UBS AG's high-profile spat with the U.S. Internal Revenue Service has made some of Switzerland's other banks wary of looking after U.S.-based clients, prompting some to stop taking money from Americans altogether and menacing the country's image as a private banking center.

UBS is currently locked in talks with the IRS which wants access to 52,000 client accounts in a moved aimed at rooting out possible tax fraud, possibly breaching Switzerland's own banking secrecy laws.Analysts expect UBS to pay a hefty settlement to resolve the matter before it goes to court, thereby protecting the identities of its clients.