Switzerland’s approach to winding down a globally systemic bank such as UBS Group AG has features that could worsen the turmoil in a hypothetical future crisis, according to a key architect of global financial rules, Bloomberg reported. The country’s “Too-Big-to-Fail” regime is too focused on preserving local activities in the event of a break-up, said Paul Tucker, former Deputy Governor of the Bank of England and a current research fellow at the Harvard Kennedy School.
Read more
Attorneys for Sung Kook “Bill” Hwang are expected to argue that prosecutors are pushing a novel and nonsensical market manipulation theory when the criminal trial of the former Archegos Capital Management boss kicks off in New York this month, Reuters reported. Archegos, a $36 billion family office which invested Hwang's personal wealth, collapsed spectacularly in March 2021 after its highly leveraged bets on a small number of stocks via complex derivatives quickly soured.
Read more
The Swiss National Bank is examining the best way that financial assets can be digitally tokenised as a way of making payments more secure and efficient, Chairman Thomas Jordan said on Monday, Reuters reported. Jordan said that central banks needed to decide how best to engage in the developments which advocates say will speed up and make payments cheaper. Tokenisation means the digital representation of claims on financial assets on a programmable platform which typically relies on distributed ledger technology.
Read more
The Swiss National Bank remains skeptical about buying bitcoins, Chairman Thomas Jordan said on Friday, despite calls from campaigners to change the law and allow cyptocurrencies to be added to its currency reserves, Reuters reported. "We have not yet decided that we want to invest in bitcoin. Actually for good reasons," Jordan told the central bank's AGM in Bern. "Currency reserves are international payments. They have to be liquid. They have to be sustainable.
Read more
Switzerland called on Wednesday for changes to global measures to prevent liquidity crunches which were introduced after the global financial crisis, to make bank runs less calamitous, Reuters reported. A year after the collapse of Credit Suisse, which was bought by UBS in an emergency rescue, Swiss officials and regulators are examining how to change liquidity rules to make banking deposits more stable and avoid bank runs. The Swiss government said in a report on how to regulate banks deemed "too big to fail" (TBTF) that liquidity requirements should be addressed internationally.
Read more
The Swiss government stopped short of offering the country’s banking watchdog the power to fine lenders, despite widespread support for the measure — including from the finance minister, Bloomberg News reported. After the near-collapse of Credit Suisse over a year ago and its takeover by UBS Group AG, Switzerland is grappling with how to handle an outsized financial sector dominated by a behemoth bank that’s more than twice the size of its economy.
Read more
The Swiss National Bank sees no need for a central bank digital currency (CBDC) to be issued to the general public, Chairman Thomas Jordan said on Monday, Reuters reported. "Consumers and businesses already have access to a wide range of efficient and innovative payment instruments offered by the private sector," Jordan told an event in Zurich, in remarks that addressed a product known as a retail CBDC.
Read more
Switzerland is accelerating efforts to reform its banking regulations a year after the collapse of Credit Suisse — and handing more power to those who will enforce them, Bloomberg News reported. The government is due to unveil long-awaited proposals for legislation in the coming days that are likely to touch on all of the main pillars of bank oversight, from capital and liquidity rules to controls on governance. UBS Group AG — the country's sole remaining globally-systemic bank that’s now over twice the size of the domestic economy — is in for heightened scrutiny.
Read more
UBS has sealed the sale of Credit Suisse's securitized products business to Apollo Global Management as part of efforts to shed non-core assets after its takeover of the collapsed banking group, Reuters reported. Apollo will purchase $8 billion of "senior secured financing facilities,” UBS said on Wednesday, adding that it expects to make a net gain of about $300 million from the deal in the first quarter of 2024. The agreement is a renegotiation of the deal Credit Suisse had reached with the U.S. buyout fund in the Swiss banking group's last-ditch attempts at a revamp to avoid collapse.
According to an official statement from Esprit, the bankruptcy of the Swiss subsidiary and the closure of the branches were “unavoidable,” Swissinfo.ch reported. “Global economic development, combined with a sharp increase in energy and logistics costs as well as negative consumer sentiment and, last but not least, the high rents for our branches, ultimately made it impossible to continue our business,” Esprit Switzerland Retail said in a statement. The Swiss Esprit subsidiary’s over-indebtedness amounted to around CHF12 million at the end of 2023.