Credit Suisse, Zurich
ZURICH, SWITZERLAND – US-based private clients of Swiss bank Credit Suisse will no longer be able to do offshore banking with the company, in a move that may signal one of the first steps by an international bank to deal with Fatca (Foreign Account Tax Compliance Act), new US financial regulations that are expected go into effect in 2014, although the bank emphasizes that the decision was taken as part of broader measures to streamline the bank’s operations.
Credit Suisse is folding its Zurich-based Private Advisors (CSPA) unit, a legally separate entity with 10 “relationship managers”, into its much larger US-based Private Banking unit, which has some 400 relationship managers.
Worldwide, the bank has 4,000 private bankers, half of whom are in Switzerland, Zurich newspaper NZZ reports.
Private Advisors is a Swiss securities dealer that is registered both in Switzerland and in the US as a broker-dealer and investment adviser.
The move was made primarily for cost-reduction reasons and to serve US clients onshore, spokesperson Alex Biscaro told GenevaLunch. “You can tell, just by looking at the number of managers, the cost [of running the unit]. You have to make sure that all the employees know all US laws”, including state laws for the client’s area of jurisdiction, he notes. A unit like this “probably needs to have a certain size”.
CSPA has always been small because it was created to provide a niche product for a niche client group. Clients were domiciled in the US and the idea was to offer them an offshore product, says Biscaro.
The bank has changed its strategy in the past decade, however, he notes, saying that the bank began to “exit offshore trading in 2008″.
Swiss National Bank's Philipp Hildebrand
Zurich, Switzerland (GenevaLunch) – Philipp Hildebrand has been the chairman of the Swiss National Bank’s three-man governing board since 1 January 2010. In an interview with Geneva’s Le Temps published 17 January, he expounds on several of the issues facing the central bank today.
Relatively upbeat on Swiss economy
Hildebrand is moderately optimistic about Switzerland’s economic prospects for the coming year. The pace of inflation will determine the rate at which monetary policy is normalized over the coming months, he says. As to the risk of inflation getting out of hand, Hildebrand says that the independence of the world’s central banks is the best insurance against the temptation by governments to inflate their way out of huge public debts.
Geneva, Switzerland (GenevaLunch) – The French public prosecutor in Nice, southern France, Eric de Montgolfier, has revealed that his office is in possession of confidential details of up to 130,000 clients from HSBC’s private banking branch in Geneva. The data was acquired by the French state when Hervé Falciani, a former IT employee of the bank, left HSBC with the details stored on his laptop. Journal de Dimanche reports that 3,000 of the bank’s clients are French citizens.
The whistleblower, who is reported to have received a new identity and is said to be in hiding in fear of his life, told French public television that he acted out of idealism: “Either you bury your head in the sand or you try to do something about it.”
Credit Suisse headquarters in Zurich's Paradeplatz, Copyright © 1997 - 2009 CREDIT SUISSE GROUP AG
Zurich, Switzerland (GenevaLunch) – Credit Suisse group has released figures that show that it earned CHF2.35 billion in the third quarter of 2009, an increase of 61 percent over the second quarter. The bank says its “low-risk” business model is vindicated by the surprisingly strong numbers. This is reflected in part by the net inflows of private client assets, which reached CHF13.1b, a growth of 5.4 percent on an annual basis. Revenues from Private Banking at CHF 723m were lower than in the second quarter, due in part to lower interest income.
UBS New York headquarters
Update 3 New York, USA (NYT) – According to the New York Times, Switzerland’s largest bank UBS, under pressure from the US tax authorities, has begun to close “hidden offshore accounts of its well-heeled American clients, potentially allowing their secrets to spill into the open.” Reuters, with a more complete report, has had the information confirmed by UBS, which notes that this is a process that started in November 2007 and which was publicized some months ago.
In July 2008 the IRS (Internal Revenue Service) demands for access to several thousand UBS and other banks’ clients’ accounts led to Mark Branson, the chief financial officer for the bank’s wealth management unit, addressing a US Senate subcommittee. He announced that UBS would be “exiting completely” the offshore banking business for US residents through its own branches: “UBS will no longer provide offshore banking or securities services to US residents through our bank branches. Such services will only be provided to residents of this country through companies licensed in the United States.” Offshore banking is a $7.3 trillion industry, also known as cross-border banking: the assets are managed in a country in which the owners of the assets are not resident.
Zurich, Switzerland (GenevaLunch) – Alex W Widmer, age 52, chief executive officer at Bank Julius Baer, has died, the bank announced Friday morning. No details were provided except to say that he “died unexpectedly overnight Wednesday.” He is survived by three children.
