ZURICH, SWITZERLAND – The Zurich Cantonal Bank (ZKB) is closing all accounts for US domiciled clients, citing growing pressure from the US, according to Tages-Anzeiger 5 January: “The pressure from the United States on foreign banks makes the risks too high.”
Urs Ackermann, ZKB spokesman told the Swiss news agency, ATS, that the measure also affects Swiss expats living in the US.
The bank alerted the clients concerned 23 December, giving them 60 days to transfer their funds to other banks.
The ZKB and other Swiss banks have been accused by US tax authorities of helping American clients hide their taxable assets. The bank had already closed down securities portfolios of US-based clients in 2009.
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Bern / Zurich, Switzerland (GenevaLunch) – Credit Suisse and UBS, Switzerland’s two largest banks, will be subject to new liquidity rules starting 30 June 2010, part of efforts by the national bank and bank supervisory body to ensure that if the banks face a major crisis they will not pull the economy down with them. The news was announced Wednesday by the Swiss National Bank (SNB) and Finma, the supervisory body that was created in January 2009, who say the new liquidity rules are necessary to replace current ones, in place since 1988. These have not been revised significantly and “cannot ensure a level of resistance to crises for big, globally active Swiss banks, which is high enough.”
Finma and the SNB defined what they call “a stringent stress scenario” which “covers a general crisis on the financial markets coupled with a creditors’ loss of trust in the bank.
Wells Fargo and Citigroup announced Monday 14 December that they will be repaying their debts to the US government, which bailed them out a little over a year ago. They were included in Tarp (Troubled Asset Relief Program) following the collapse of Lehmann Brothers in 2008, with its subsequent chaos in financial markets. They are now the last banks to leave the programme, which forced banks to accept greater regulation in exchange for reduced risk.
Links to other sites: Financial Times, Reuters
Asian stocks rose Monday 26 October on news that Toyota had made an “unexpected profit” and South Korea posted the best growth figures for its economy in seven years, reports Bloomberg. The global economic picture remains mixed, with the UK Monday posting figures for July-September 2009 that show the recession on a par with that of 1979-81, says the FT. In the US, the Federal Reserve closed three more banks, bringing the number of closures to 100 for the year, the highest figure since 1992.
Links to other sites: BBC, Bloomberg, Financial Times
Ten of the largest US banks, which together account for two-thirds of the capital of US banks, will need a $74.6 billion boost in capital to cope should the recession worsen, a “stress test” of 19 banks has shown. Bank of America will need the most, an estimated $33.9 billion. The banks will look to a mix of solutions to raise the money. BBC, Bloomberg
Nineteen major US banks, among them Citibank, Wells Fargo and Bank of America, may need less capital, $54 billion, than has been widely feared, and Treasury Secretary Timothy Geithner says the picture that is emerging is “reassuring,” Bloomberg reports. The Federal Reserve is to announce the results of “stress tests” on 19 US banks, Thursday 7 May. Financial Times
Updated 19:00 US President Barack Obama’s government announced Wednesday morning in Washington that any bank receiving government assistance will have a pay cap of $500,000 imposed on its executives. BBC, New York Times
The once unthinkable is now being debated in the US: will the country consider nationalizing its biggest banks? Reuters says people are asking, with estimates of the shortfall of capital for US banks ranging from $700 billion to $2 trillion.
The Bank of America Friday has been given $20 billion in bailout money from the US federal government, in addition to the $25 billion it received in October, making it the second largest recipient of aid to banks in the US, after Citi Group. Bank of America has also been given guarantees against toxic assets up to nearly $100 billion, reports Reuters
Citigroup over the weekend became the latest company to be bailed out by the US government, with an agreement reached for the bank to receive $20 billion in cash and guarantees of up to $306b on “troubled mortgages and toxic debts,” reports Bloomberg.
