Stock markets down on gloomy news
ZURICH, SWITZERLAND – Standard & Poor’s applied new credit rating standards to 37 of the world’s largest banks 30 November, which resulted in the downgrading of a number of major banks, for different areas of their businesses. Seven of eight US banks on the list were downgraded. China Construction Bank received an upgrade, the only bank to do so. And 20 banks remained “stable”.
The agency published new criteria for bank ratings 9 November, so the downgrades were not completely unexpected, but shares fell across Europe on the news, reports Business Week. S&P’s did not immediately provide details oabout individual downgrades, but will do so Wednesday. Switzerland’s largest bank, UBS, was given a rate of A, down from A+.
Other banks downgraded include US-based Bank of America Corp. and several subsidiaries, Citigroup, Goldman Sachs Group, JP Morgan Chase & Co, Morgan Stanley and Wells Fargo & Co.
In the UK, Barclays, Lloyds, Bank of Scotland and HSBC were downgraded.
The changes could increase the borrowing costs of the banks.
AP suggests that Bank of America could be hurt most by the cut, while the Financial Times
Zurich, Switzerland (GenevaLunch) - UBS denies as “completely unfounded and without merit” charges 24 November by Bernard Madoff’s trustee, says Bloomberg, which quotes an e-mail received from the bank. Bernard Madoff’s court-appointed trustee Irving Picard filed a sealed complaint against the bank in Manhattan, New York in the US Tuesday. The lawyer is seeking $2 billion from the Swiss bank and several others, “alleging 23 counts of financial fraud and misconduct against UBS AG and related entities and individuals for collaboration in the Bernard Madoff Ponzi scheme.”
Madoff was sentenced to 150 years in prison in 2009 for fraudulent activities that stole more than $65 billion from investors around the world.
Picard’s court complaint is sealed, he says on the Madoff Investment Securities Liquidation web site, because of UBS’s insistence on confidentiality.
Alexandria, Virginia, USA (GenevaLunch) - A doctor based in Virginia in the US pleaded guilty Tuesday 16 February to conspiracy to evade taxes. This is reportedly the first IRS (US tax authority) case where a non-US bank other than Switzerland’s UBS is cited as providing advice about how to evade taxes.
Washington, DC (GenevaLunch) – The US Justice Department, in a document obtained by Swiss wire service ATS, is reported to be insisting that it will not relax its stance on Swiss bank UBS. A US federal court in Miami 13 July will hear a civil case brought by the IRS tax authority against the Swiss bank. The IRS says UBS must hand over the names of owners of 52,000 bank accounts. UBS and the Swiss government say it cannot do so because the bank would be breaking Swiss banking secrecy and data protection laws, and that the demand by the IRS in any event runs counter to the existing US-Swiss treaty that covers demands for assistance in criminal cases.
