Can banks weather the next financial storm?
Keystone
Several of the world’s largest banks – including Swiss banks UBS and Credit Suisse – need to revise their emergency plans after US regulators gave them a failing grade on Tuesday.
This content was published on
1 minute
swissinfo.ch and agencies
The Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) came to the conclusion after examining the banks’ “living will” policies. The supervisory authorities found that the banks had unrealistic and inadequate settlement plans for dealing with how clients might behave in a crisis.
In addition, the banks had failed to adjust their corporate structures to facilitate a settlement during economically difficult times. The regulators have now directed them to come up with simpler legal structures.
The so-called living wills were a response to the last major financial crisis, when the collapse of the Lehman Brothers investment bank shook the world economy. In 2012, the authorities demanded that financial institutions come up with detailed contingency plans to show how they would handle a crisis. The banks now have until the middle of 2015 to submit their improved plans.
In addition to UBS and Credit Suisse, other banks include Bank of America, Bank of New York, Barclays, Citigroup, Deutsche Bank, Morgan Stanley and State Street.
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Improved lending wins cautious praise from SNB
This content was published on
Since last year’s warnings of “below average” capitalisation and a gloomy outlook for the banks’ futures if they didn’t adjust their lending practices, the SNB has significantly softened its tone and even praised UBS and Credit Suisse for their efforts in the past year. Both banks significantly reduced their investment banking activities, issuing more bonds…
This content was published on
Dark pool platforms enable investors to buy and sell positions anonymously, thus shielding their trades from rivals. The secretive activity is often combined with a high-frequency trading service that employs complex computer algorithms to complete multiple transactions within fractions of a second. The investigatory floodgates were opened last month when New York prosecutors accused British…
This content was published on
Swiss bank UBS was placed under formal investigation in France on Wednesday over allegations that it had helped wealthy French customers evade the tax man, the bank has told Reuters.
This content was published on
The lawsuit claims that Fannie Mae’s trading losses were directly incurred by the banks submitting false data used to set the London interbank offered rate (Libor). The rate, used to measure the cost of borrowing between banks, is the basis for trillions of dollars in contracts, including mortgages and bonds. US banking giants Bank of…
You can find an overview of ongoing debates with our journalists here. Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.