Switzerland must solve a dispute with the United States over wealthy citizens using secret Swiss accounts to dodge taxes under existing laws and should continue to protect bank secrecy, the Swiss Bankers Association head said on Monday.

The association's president, Patrick Odier, made the comments after newspapers reported on Sunday the United States had given an ultimatum to Switzerland, saying Credit Suisse and nine other banks could face charges unless detailed information on U.S. tax evaders using Swiss accounts was handed over this week.

There cannot be an ultimatum. Friendly states must have a will to negotiate, Odier told a news conference.

I am sure that the United States understands that we are not a banana republic and that we want to defend our legal order just as America also wants to do and that is why I am hopeful that a solution is possible.

Odier said Switzerland must avoid reverting to emergency law as it did to settle a U.S. investigation against UBS when it bent strict bank secrecy laws to reveal details of some 4,450 UBS clients to avoid criminal charges.

Bank client secrecy protects wealth and does not hide it. This protection remains important, he said.

The United States has ratcheted up the pressure in recent months, telling Credit Suisse it is a target of a formal investigation and indicting a number of Swiss bankers, alleging they helped former UBS clients shift their assets to other Swiss banks rather than coming clean to the taxman.

A long tradition of bank secrecy has helped Switzerland build up a $2 trillion offshore financial industry, but the country has agreed in recent years to do more to help hunt tax cheats amid a global crackdown on tax havens.

DEALS WITH GERMANY, BRITAIN

Odier said an accord should be possible under the terms of the existing UBS deal and a new double taxation agreement with the United States that Switzerland approved in 2009 but is still awaiting ratification by the U.S. Senate.

The United States should take note of the example of the tax agreements with Germany and Britain. Bilateral problems between friendly states should be able to be solved in an amicable way, Odier said.

Last month, Switzerland agreed with Germany and Britain to tax money kept by their residents in secret Swiss accounts and also introduce a withholding tax on future interest earned, a proposal rejected by Washington.

The government is keen to find a solution that would avoid needing the approval of parliament which only reluctantly agreed to the UBS treaty under emergency law last year, especially ahead of Swiss elections next month.

But the United States seems to be pushing for more than current Swiss law would allow, seeking details of all U.S. clients with accounts worth at least $50,000 between 2002 and 2010 at banks including Credit Suisse, Julius Baer and Wegelin as well as the Zurich and Basel cantonal banks.

Two Swiss Sunday papers said a letter sent by U.S. Deputy Attorney General James Cole on August 31 demands detailed figures on tax evasion at Credit Suisse by Tuesday.

The SonntagsZeitung newspaper cited a banking source as saying the Swiss banks will also have to pay a fine of up to 2 billion Swiss francs ($2.6 billion).

Mario Tuor, a spokesman for the Swiss department for international financial affairs, would only say that talks are underway and that Berne wants a solution based on existing law.

Shares in Credit Suisse were down 7.6 percent by 1008 GMT, falling even further than the European banking sector which was off 5 percent after news that a U.S. regulator is suing several banks in a separate matter.

($1=0.783 Swiss francs)

(Editing by Greg Mahlich and Jon Loades-Carter)

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