Iris Mack's Blog - European Banks

UBS, Credit Suisse Face Tough New Capital Rules

Mon, 04 Oct 2010 17:03:00 --0100

A Swiss government panel proposed rules that would require the nation?s two big banks, UBS and Credit Suisse, to hold more capital in reserve than international competitors as a way to provide extra insurance against a catastrophic failure. The rules, which require approval by the Swiss parliament, address concerns by the Swiss National Bank and others that a severe crisis at Credit Suisse or UBS could prove more than the nation of 7.8 million people could bear. The two banks? combined balance sheets are five times the size of the Swiss economy. ?Given their size, it cannot be ruled out that the big Swiss banks are potentially T.B.T.B.R.,? or too big to be rescued, the Commission of Experts said in a report. The commission, which was appointed by the Swiss Federal Council, included representatives of the central bank as well as industry and the two big banks. Please read more in the Wall Street Journal.

UBS Makes Push for U.S. Mortgages

Mon, 02 Aug 2010 13:24:00 --0100

Swiss bank UBS will hire two executives to lead efforts to make more U.S. mortgage loans. Now maybe I am missing something here, but the U.S. mortgage market is a mess. Despite the epidemic of battered U.S. mortgages, UBS officials say the home-loan business offers an attractive cross-selling opportunity without exposing the company to excessive risk. In addition, I thought UBS got into trouble in the past due its dealings in the U.S. mortgage market. So perhaps some one can enlighten me as to what UBS plans to accomplish by jumping back into the U.S. mortgage market? Read more...

EU Banks Survive Stress Test

Sun, 25 Jul 2010 17:55:00 --0100

European regulators painted a rosier-than-expected portrait of the continent's beleaguered banking sector on Friday, provoking criticism that the government's "stress tests" weren't tough enough on banks. The tests found that 91 banks in 20 European countries could face ?566 billion ($730 billion) in total potential losses in a deteriorating economic and financial environment. But only seven banks flunked the tests, coming up short a combined ?3.5 billion in capital. Read more in the Wall Street Journal.

Euro Drops Below $1.29

Tue, 20 Jul 2010 15:32:00 --0100

The euro declined against the dollar as investors cast cautious eyes toward European bank stress tests. More on this story may be found in the Wall Street Journal

German Prosecutors Search Credit Suisse Offices in Tax-Dodge Probe

Wed, 14 Jul 2010 19:06:00 --0100

Prosecutors in Germany raided 13 offices of Credit Suisse AG on Wednesday as the government searched for evidence that bank employees may have assisted customers in evading taxes. This news comes amid a broad assault on Swiss bank secrecy and the country's status as a leading tax haven. The German case is the latest in which countries are using bank account data taken by bank employees to initiate investigations. More on this story may be found in the Wall Street Journal.

Mass Leak of Client Data Rattles Swiss Banking

Fri, 09 Jul 2010 13:10:00 --0100

HSBC officials allege that Hervé Falciani copied thousands of files of wealthy clients of its Swiss private-banking arm. Swiss authorities are investigating whether Mr. Falciani stole bank records and violated banking secrecy laws. Mr. Falciani and another HSBC employee - Georgina Mikhael - offered the data to governments and other banks in Europe and the Middle East, according to people familiar with the investigation. It is alleged that he and Ms. Mikhael set up a virtual company, with Mr. Falciani using an alias. Mr. Falciani admits being in possession of the data and confirms contacting governments about it. But he and Ms. Mikhael both deny breaking any Swiss banking secrecy laws. The emails sent regarding the data didn't ask for money. He says his goal wasn't to profit from the data, but rather to expose secrecy in banking practices. "I am not a Robin Hood, I'm not a mercenary," Mr. Falciani said in an interview. "I acted like a citizen." Whatever the case, his leaking of client's data rocked the Swiss banking world! More details of this fascinating story may be found in the Wall Street Journal.

EU CAPS Bank Bonuses

Wed, 07 Jul 2010 21:46:00 --0100

Wall Street Journal EU lawmakers have voted to cap bankers' short-term cash bonuses from 2011. Members of the European Parliament voted 625-28 in favor of the new rules which will become final when they are approved by EU finance ministers as expected next week. From 2011, bankers will only be able to get part of their yearly bonuses in cash upfront. The other 70% will be held back and paid out if the company performs well.

Swiss Banks Start to Come Clean

Mon, 28 Jun 2010 11:01:00 --0100

According to the New York Times editorial, Switzerland Starts to Come Clean, the U.S. Internal Revenue Service (I.R.S.) forgoes about $100 billion a year in uncollected taxes from businesses and wealthy individuals that keep their money in offshore secretive accounts. This is a crime! It has also proved notoriously difficult to stop because of the bank secrecy statutes in tax havens around the world. Recently the Swiss Parliament?s approval of a deal to give the I.R.S. the names on 4,450 American accounts at UBS is believed to be an important victory. And with international tolerance for this grubby business running out, other tax havens are taking a hard look at their policies.

Americans May Have "Mere Hours" to Disclose UBS Accounts to IRS

Sun, 20 Jun 2010 15:10:00 --0100

Here's a follow up to my blog post Swiss Parliament Backs UBS Pact - Finally. According to Bloomberg , U.S. citizens and residents with UBS accounts are racing the clock to disclose their secret holdings to the IRS after the Swiss Parliament ratified an agreement to surrender the names of 4,450 bank clients. Lawyers said Americans who ignored an IRS offer last year to reduce penalties in exchange for voluntary disclosures are now flooding their offices with calls seeking advice on how to avoid possible sanctions, which could include prison sentences.

Europe Agrees on Stress Tests for Banks

Fri, 18 Jun 2010 16:14:00 --0100

European governments agreed to submit their banks to public "stress tests". The decision by EU leaders overcomes longstanding resistance to disclosure of the results of the "stress tests," which are aimed at demonstrating how well banks would stand up to serious economic shocks. More details on these bank "stress tests" may be found in the Wall Street Journal .

Swiss Parliament Backs UBS Pact - Finally

Thu, 17 Jun 2010 12:38:00 --0100

Wall Street Journal Following up on my recent blog post Swiss Upper House Rejects Call for Referendum on UBS Pact , Swiss legislators have approved a law that clears the way for the government to hand over the names of thousands of alleged U.S. tax evaders to the U.S. IRS. Hence the Swiss have dodged the risk that the U.S. would reopen a tax case against UBS.

Swiss Upper House Rejects Call for Referendum on UBS Pact

Wed, 16 Jun 2010 09:34:00 --0100

Here's a followup to one of my very recent blog posts (like a few minutes ago) - Swiss Parliament Backs UBS Pact. Just in from the Wall Street Journal: The Swiss UPPER house of parliament rejected a proposal made by the LOWER house to hold a popular referendum on a bill that would allow the Swiss government to hand over the names of alleged tax dodgers to U.S. authorities. The UPPER house's refusal to include the referendum option means the LOWER house will have to once again debate the Swiss-U.S. pact. This story is beginning to make me dizzy: Swiss upper house, Swiss lower house, referendums, etc. Okay, I will lay low until they figure this out. Disclaimer: The reason I am interested in this story is because I am an American who spends some time in Switzerland!

Swiss Parliament Backs UBS Pact

Wed, 16 Jun 2010 08:38:00 --0100

Following up on my previous blog Swiss Lower House Rejects UBS Pact , the lower house of Parliament approved a bill that would allow the Swiss government to hand over the names of alleged tax dodgers to the U.S. Internal Revenue Service (IRS). Swiss bank UBS admitted it had used the accounts to help thousands of Americans evade taxes on about $20 billion of income. Under the settlement's terms, the Swiss government must hand over the names of 4,450 American account holders to the U.S. IRS by August. This law would allow the Swiss government to fulfill its obligations under a U.S.-Swiss settlement of a tax case last year involving hidden UBS offshore accounts. However, this Swiss legislation is jeopardized by the inclusion of a clause making the proposed law conditional to a popular referendum. Swiss lawmakers have less than a week to resolve this issue. A referendum would make it impossible for Switzerland to meet the August deadline to hand over the names to the U.S. IRS because it would take months to conduct a signature drive to launch a popular vote. The U.S. government said it is prepared to reopen the case against UBS if the Swiss miss the August deadline. The Swiss government has argued against a referendum.

International Banks are Cutting American Expatriates Adrift

Mon, 14 Jun 2010 21:22:00 --0100

Wall Street Journal American expatriates are becoming the world's financial refugees. Legislation from the U.S. government is making it difficult and expensive for international banks to service U.S. citizens that live abroad. Expats are being left with a diminishing range of banking options. An increasing number are taking the most drastic step and renouncing their citizenship.

Data Show Big Exposure for Banks in Euro Zone

Mon, 14 Jun 2010 21:06:00 --0100

Wall Street Journal BIS data showed that banks based in the 16 countries that use the euro accounted for $1.58 trillion, or 62%, of all internationally active banks' exposures to residents of Greece, Ireland, Portugal and Spain. That included $727 billion of exposure to Spain, $402 billion to Ireland, $244 billion to Portugal and $206 billion to Greece. About half of the Greek exposure is held by France. France and Germany held the greatest exposure to the group, collectively carrying 61% of the total euro-area burden: $493 billion and $465 billion, respectively.