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Watchdog keeping tabs on Ebner’s bank

Plummeting markets have put paid to Martin Ebner's investment strategy and his credibility Keystone

The Federal Banking Commission is keeping a close eye on Swiss financier Martin Ebner's BZ Bank, amid signs that his financial empire is crumbling.

Banking regulators confirmed they were monitoring BZ Bank’s finances on a daily basis, a week after its parent company, BZ Group, was forced to cede control of its four major listed investment funds.

“We are watching BZ Bank,” said Kurt Bucher of the Federal Banking Commission. “It’s not surprising that we would want a daily report… because of the sharp market fluctuations.”

Ebner, who encouraged thousands of Swiss households to invest in the market during the height of the boom, was forced to sell the “Visionen” funds after plummeting stock markets wiped billions of francs off his portfolio.

Failure

Ebner admitted at the weekend that he had failed to “diversify” his investments properly.

The Banking Commission said Ebner was cooperating fully, and that the BZ Bank met all the legally required capital standards.

Bucher declined to give details about the bank’s financial position, but said the bank’s investments were separate from those of the BZ Group.

On Monday, the Wall Street Journal reported that Ebner had been given some breathing space on his debts so that he can stabilise his BZ Group.

The paper quoted unnamed sources as saying that eight creditor banks – including Credit Suisse – had agreed to allow the Group to miss scheduled loan payments of SFr3 billion for about a year.

Both BZ Group and Credit Suisse declined to comment on the report.

According to the paper, the move is part of a package of measures to help steady the Group through its current liquidity crisis.

Trouble at the bourse

The precarious state of Ebner’s finances – his empire is thought to be in debt to the tune of SFr10 billion ($6.8 billion) – has driven some stocks sharply lower on the Swiss bourse, amid fears that he will be forced to sell off more of his holdings.

ABB and Credit Suisse, in which he holds stakes of ten and five per cent respectively, saw their share prices plummet as the markets opened on Monday and were still trading sharply lower on Tuesday.

swissinfo with agencies

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