Swiss President Hans-Rudolf Merz asked U.S. Treasury Secretary Timothy Geithner on Saturday to drop a legal case involving clients of UBS bank in return for a new tax accord the two countries are about to negotiate.

Merz told reporters the new tax agreement would need to be adopted by lawmakers in both countries and perhaps be put to referendum in Switzerland, where it could stumble if the U.S. tax evasion case was still hanging over UBS.

Merz, who met Geithner in Washington on the sidelines of the International Monetary Fund's semi-annual meetings, told reporters Geithner understood the point and said he would consider it, even if he could not reply immediately.

Under international pressure Switzerland, whose banking industry is famous for its secrecy, announced earlier this month that it would move toward internationally accepted standards of bank information disclosure in tax fraud cases.

U.S. tax authorities are pursuing a civil lawsuit against UBS, seeking to access the data of another 52,000 Americans it says are hiding about $14.8 billion in assets in Swiss bank accounts.

On April 2, U.S. authorities arrested and charged an accountant in Florida in the first of what they said could be a series of tax evasion prosecutions of American clients of Swiss bank UBS AG.

(Reporting by Brian Love, Editing by Chizu Nomiyama)

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