The Swiss government lowered its outlook for economic growth this year, citing headwinds such as the global logistics logjam and the slow resumption of intercontinental travel, Bloomberg News reported. Gross domestic product is forecast to expand 3.4% this year, down from a previous forecast of 3.8%, the State Secretariat for Economic Affairs said on Thursday. The inflation rate is set to remain low, averaging just 0.5% in 2021.
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Switzerland
EY auditors in Switzerland failed to raise the alarm over multimillion-dollar jewelery purchases and approved huge payments to opaque offshore companies in the years before one of the country’s biggest ever corporate collapses, the Irish Times reported. Zeromax, a conglomerate based in the Swiss canton of Zug, had a business empire in Uzbekistan with interests ranging from textile processing to natural gas extraction that made it the Asian country’s largest employer, accounting for as much as 10 per cent of GDP.
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Swiss-Irish food group Aryzta has agreed a new €500 million revolving credit facility with three banks and has announced the disposal of its Brazilian businesses, the Irish Times reported. No financial details have been disclosed on the sale of the Brazilian subsidiaries to Grupo Bimbo SAB de CV. The transaction is expected to close shortly. Aryzta said the new credit facility, which is expected to be used by early October, is underwritten by Credit Suisse, Rabobank and UBS. It replaces the group’s current €800 million facility, which maters in September 2022.
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Credit Suisse Group AG knew Archegos Capital Management was a massive risk and didn’t take actions to fix it, according to an investigation the bank commissioned into the collapse of the family investment firm, the Wall Street Journal reported. The report released Thursday, prepared by a law firm for Credit Suisse, detailed how the bank for years granted Archegos special dispensation to avoid rules meant to protect the bank. It also ignored staff warnings before the family investment firm’s collapse.
A company owned by the billionaire Barclay family is trying to refinance a $200 million loan it received from Greensill Capital, a move that would potentially offer some relief to Credit Suisse Group AG funds that invested in debt arranged by the now-defunct specialty lender, Bloomberg News reported. Shop Direct Holdings Ltd. is in advanced talks to refinance the debt from Greensill, which was then sold on to funds run by Credit Suisse. The loan was unpaid as of June 29, according to a Credit Suisse presentation seen by Bloomberg.
Credit Suisse Group AG is considering centralising the management of its bankers to the world's wealthy, reversing a regional structure put in place six years ago, as the scandal-plagued Swiss bank looks for ways to tighten controls and improve operations, Reuters reported. The bank’s wealth management business is split, residing in three separate divisions -- the international business, Swiss business and a separate Asia-Pacific unit. Some executives felt that separation had not worked well and combining the businesses into one group would offer benefits, one of the sources said.
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In mid-March, shares in ViacomCBS Inc. and Discovery Inc. rocketed skyward. That was great news for Bill Hwang. His firm, Archegos Capital Management, had borrowed billions from Credit Suisse Group AG to make wagers on a handful of stocks, including the entertainment companies, according to a Wall Street Journal reported. As is standard practice, Archegos had handed over cash to Credit Suisse to secure its bets. With the stocks more than doubling since the start of the year, Archegos asked for some of that money back, and it was credited.
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The battering to Wall Street banks from Archegos Capital Management topped $10 billion after UBS Group AG and Nomura Holdings Inc. reported fresh hits caused by the fund’s collapse, the Wall Street Journal reported. UBS, Switzerland’s biggest bank by assets, said it lost $774 million following Archegos’s implosion, a bigger hit than analysts expected, deepening the damage caused by the fund. Meantime, Japan’s Nomura, which flagged losses of around $2 billion last month, upped its total damage tally to $2.85 billion.
Switzerland’s top financial regulator said the collapse of Archegos Capital Management LP will have consequences for how banks deal with risk as one of the country’s biggest lenders counts its losses from exposure to the investment firm, Bloomberg News reported. “This will be meticulously examined and there will be lessons, maybe for regulators, maybe for the banks who were involved, maybe for supervisors,” Mark Branson, the head of Swiss regulator Finma, said Wednesday in Berlin.
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Credit Suisse has made further progress in winding down funds connected with Greensill Capital and is able to distribute another $1.7 billion to investors, the bank said on Tuesday, Reuters reported. This takes the total distribution so far to $4.8 billion, the bank said, following an earlier payout of $3.1 billion. The bank said it has so far collected $2 billion from receivables redeemed when the four supply chain finance funds (SCFFs) were suspended on March 1.
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