(Adds more comments from minister, background)
NEW YORK, July 8 (Reuters) - Stability at Swiss banking
giant UBS
"We know from the Lehman Brothers case that when banks of this size have severe problems, it violates financial stability. UBS here (in the United States) is a very important employer, a very important investor, much more so than in Switzerland," Leuthard told reporters at an event at the Swiss-American Chamber of Commerce in New York.
U.S. authorities have accused UBS of helping rich clients hide money in secret Swiss accounts. The bank faces a court hearing in Miami next week after refusing to disclose data on 52,000 American holders of secret Swiss bank accounts to U.S. Internal Revenue Service.
Meanwhile, last month Switzerland and the United States reached an agreement on a double taxation treaty, a key step toward removal from an OECD list of tax havens.
Leuthard, asked about whether the Swiss parliament would ratify the treaty if there is no settlement in the UBS case, said she was not making any threats but added: "It's not a threat, but I know my parliament".
The Swiss government has said it will be difficult to get parliament to approve a new treaty agreed with Washington unless the UBS case is settled.
Regarding the Swiss economy, Leuthard said it would still struggle next year but conditions would improve after that.
"2010 will be difficult, but we see things getting better by 2011," she said.
Asked whether deflation was a danger, she said: "I don't think so," noting that wages in the country have increased. (Reporting by Steven C. Johnson and Gertrude Chavez-Dreyfuss; Editing by Kenneth Barry)