Swiss lawmakers ushered in a new era of uncertainty for the country's financial sector Wednesday by nixing a proposal to let banks in the Alpine nation reach a settlement with US authorities who have been targeting them for allegedly assisting American tax evaders.

Switzerland's lower house of Parliament voted 123-63 against the measure, which would have enabled many of the country's banks to sidestep the Swiss banking secrecy laws and start handing information to the US Department of Justice about any past help they may have given to Americans hiding undeclared wealth in Swiss accounts.