For those 'US Person' retirees living outside the US, having a Swiss bank account may not be the problem. There are other ways in which they may fall foul of US tax laws and subject themselves to committing tax evasion. For example, if they live in a country which offers financial benefits to the retired, many of those benefits (even if tax free in the country of residence) must be declared on a 1040 tax form. The benefits may include payments made to assist in the care of an elderly disabled person, for example. Note: it may be suggested by the more creative tax advisors that telling the IRS about benefits is 'optional'. While the wording in the US Code does specifically mention benefits from the US Federal Government and US states, it may not specifically mention benefits from foreign countries. Taking such a stance may be very risky if you are not a major international accounting firm.
As regards the Swiss situation, bear in mind the actions taken against the Swiss Financial Institutions come not from the IRS/Treasury, but instead come from the US Department of Justice. All FI's in Switzerland have become guilty by association due to UBS and Credit Suisse.
As regards FATCA, perhaps one of the best explanations of the 'why and how' comes not from the IRS or Americans living abroad, but from the foreign banks themselves. The following is an information clip (You Tube) from HypoVereinsbank in Germany. It contains some real subtleties, but does explain their (and all FI's around the world) sole reason for adhering to FATCA legislation, and of the many clips available is perhaps the most informative.
Moderators: This clip does contain a splash screen at the end advertising HypoVereinsbank. I hope you will forgive this as the information contained is one of the most accurate and concise explanations of the workings of FATCA from a banks perspective.
FATCA: The new tax law for US citizens abroad - YouTube
Another viewpoint concerning FATCA is from the academic perspective. The following clip is from a CBC (Canada) nationally televised segment during their nightly news show in January, 2014. The person interviewed is Professor Allison Christians. Allison Christians is the H. Heward Stikeman Chair in the Law of Taxation at the McGill University Faculty of Law, Montreal, Quebec, and is acknowledged as one of the worlds leading experts in international tax laws and treaties. She is discussing FATCA as it relates to Canada, but all the same issues mentioned apply equally to any other country in the world faced with implementing FATCA.
FATCA report, CBC News Toronto, Jan. 13, 2014 - YouTube
Any US Person retired, or contemplating retiring, in a foreign country should be aware that any bank account in that foreign country will now come under the scrutiny as explained above.