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Shares of JPMorgan and some of the other the largest U.S. banks rose on Monday, while those of mid-tier banks fell. [1/3] People walk past a First Republic Bank branch in San Francisco, California, U.S. April 28, 2023. "This is not the world financial crisis, this is not the savings and loan crisis. JPMorgan also entered into a loss-share agreement with the FDIC on single family, residential and commercial loans it bought, but will not take First Republic Bank's corporate debt or preferred stock. The failed bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank from Monday, it added.
First Republic was one of the major casualties of the banking crisis triggered in March, when depositors fled en masse from some U.S. lenders to institutions such as JPMorgan that they thought were safer. [1/2] People walk past a First Republic Bank branch in San Francisco, California, U.S. April 28, 2023. JPMorgan has assumed all of the bank's deposits, it said, and will repay $25 billion of the $30 billion big banks deposited with First Republic in March. JPMorgan said it expected to achieve a one-time, post-tax gain of about $2.6 billion after the deal. The failed bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank from Monday, it added.
The Federal Reserve, which is responsible for supervising banks in the United States, plans to release its report at 11 a.m. Another federal regulator, the Federal Deposit Insurance Corporation, will release a similar report on Signature Bank, which fell two days after SVB, in the afternoon. Those assets began steadily losing value when the central bank raised interest rates at a rapid pace last year. As the bank stumbled, it became clear that virtually all — 97%, according to data from Wedbush Securities — of SVB’s deposits were uninsured. There are indications the Fed, SVB’s primary regulator, warned the bank as early as 2019 about its insufficient risk-management systems, according to reporting from the Wall Street Journal and the New York Times.
Resolving Credit Suisse: an alternative history
  + stars: | 2023-04-27 | by ( Liam Proud | ) www.reuters.com   time to read: +8 min
Reuters GraphicsThe market shock will be all the more extreme because Credit Suisse doesn’t obviously need more capital. It seems perverse to put taxpayer money on the line while leaving the Credit Suisse bonds untouched. Of the 30 global lenders classed as systemically important by the Financial Stability Board, Credit Suisse is the third-smallest by total assets. It also enables the Swiss National Bank to offer Credit Suisse an open-ended credit line, hopefully ending the bank run. Credit Suisse is suffering from a crisis of confidence brought on by years of mismanagement, rather than a system-wide meltdown.
Craving Beauty, but at What Cost?
  + stars: | 2023-04-26 | by ( Jennifer Szalai | ) www.nytimes.com   time to read: +2 min
THE UGLY HISTORY OF BEAUTIFUL THINGS: Essays on Desire and Consumption, by Katy KelleherActivities that we tend to think of as distinctly human often have nothing to do with immediate survival. In “The Ugly History of Beautiful Things,” Katy Kelleher writes about the extreme and sometimes hideous lengths that people have gone to in order to obtain coveted objects of beauty: ruining their health, wrecking the planet, inflicting suffering on others. “I’ve never found an object that was untouched by the depravity of human greed or unblemished by the chemical undoings of time,” Kelleher writes. A journalist who writes about home and design, she realizes that it has been her job to encourage others to do the same. Kelleher points out that an element of ugliness can be part of an object’s appeal, distinguishing between the intriguingly beautiful and the boringly pretty.
[1/2] A view shows the logo of Credit Suisse on a building near the Hallenstadion where Credit Suisse Annual General Meeting took place, two weeks after being bought by rival UBS in a government-brokered rescue, in Zurich, Switzerland, April 4, 2023. UBS and Credit Suisse declined to comment. What's more, UBS doesn't tend to lend to potential clients as Credit Suisse has often done, a move that can persuade some customers. "There are clearly parts of Credit Suisse that have had a bad culture," UBS Chairman Colm Kelleher told reporters on March 29. UBS ranked 14th advising on mergers globally last year, behind 11th placed Credit Suisse, according to data compiled by Dealogic.
[1/2] A view shows the logo of Credit Suisse on a building near the Hallenstadion where Credit Suisse Annual General Meeting took place, two weeks after being bought by rival UBS in a government-brokered rescue, in Zurich, Switzerland, April 4, 2023. UBS and Credit Suisse declined to comment. What's more, UBS doesn't tend to lend to potential clients as Credit Suisse has often done, a move that can persuade some customers. "There are clearly parts of Credit Suisse that have had a bad culture," UBS Chairman Colm Kelleher told reporters on March 29. UBS ranked 14th advising on mergers globally last year, behind 11th placed Credit Suisse, according to data compiled by Dealogic.
UBS can score a quick win with Swiss sale
  + stars: | 2023-04-12 | by ( Liam Proud | ) www.reuters.com   time to read: +4 min
LONDON, April 12 (Reuters Breakingviews) - Credit Suisse’s (CSGN.S) Swiss business is theoretically the jewel in the bank’s tarnished crown. Hiving off the Credit Suisse local unit could save Kelleher and his Chief Executive Sergio Ermotti a lot of grief. By contrast, UBS is paying just $3.6 billion for all of Credit Suisse, based on the buyer’s most recent share price. Kelleher could in theory just hand the Credit Suisse local division to shareholders, but that could prove destabilising if they all cash out immediately. UBS will rescue Credit Suisse in a deal worth about 3 billion Swiss francs, Swiss authorities and the two banks said on March 19.
How much short sellers contributed to the downward spiral reprises the debate about whether so-called shorts are market watchdogs or opportunistic investors who profit from others’ misery. In the case of the banking crisis, a review of data and interviews with short sellers and their critics show, the answer may be both. Some high profile short sellers were later celebrated as making prophetic calls about the U.S. housing market. Even so, interviews and public postings show at least some short sellers had placed bets against regional banks well before the crisis hit. SHORT POSITIONSSuch early short sellers, however, were in the small minority.
[1/3] Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland, March 20, 2023. REUTERS/Denis Balibouse/File PhotoBASEL, April 5 (Reuters) - UBS (UBSG.S) executives sought to assure investors on Wednesday that Switzerland's largest bank can make its unexpected takeover of Swiss rival Credit Suisse (CSGN.S) work and pay off for its shareholders. "We believe the transaction is financially attractive for UBS shareholders," he said. Looking at how to navigate the mammoth task of integrating Credit Suisse, the success of which Switzerland depends on, UBS has already taken the first steps. "The acquisition of Credit Suisse will be a major challenge," Hamers said, while echoing the bank's chairman in highlighting new opportunities.
[1/3] Buildings of Swiss banks UBS and Credit Suisse are seen on the Paradeplatz in Zurich, Switzerland, March 20, 2023. "We believe the transaction is financially attractive for UBS shareholders," he said. The hastily arranged rescue, not only angered and unsettled both banks' shareholders, but also many in Switzerland. Looking at how to navigate the mammoth task of integrating Credit Suisse, the success of which Switzerland depends on, UBS has already taken the first steps. "The acquisition of Credit Suisse will be a major challenge," Hamers said, while echoing the bank's chairman in highlighting new opportunities.
[1/3] UBS Chairman Colm Kelleher speaks during the Annual General Meeting, two weeks after buying rival Swiss bank Credit Suisse, in Basel, Switzerland, April 5, 2023. REUTERS/Pierre AlbouyBASEL, April 5 (Reuters) - UBS's (UBSG.S) Chairman told the bank's annual shareholder meeting on Wednesday that the takeover of rival Credit Suisse (CSGN.S) was a significant milestone for Switzerland and for the global financial industry. Kelleher addressed shareholders for the fist time since the announcement of the takeover, urgently engineered and pushed through by the Swiss authorities last month. Outlining UBS's strategy, Kelleher said the Credit Suisse takeover would help the bank to deliver value to the Swiss economy and accelerate its strategic plans to expand its position as the leading wealth manager, particularly through growth in the United States and Asia. Reporting by Noele Illien Editing by Tomasz JanowskiOur Standards: The Thomson Reuters Trust Principles.
Last month, Swiss authorities announced that UBS would buy Credit Suisse in a shotgun merger to stem further banking turmoil after the smaller lender had come to the brink of collapse. After a run on deposits, the Swiss government had turned to UBS, which agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion), while the Alpine state put up more than 200 billion francs of support and guarantees. Now, the bank is looking at how to navigate the mammoth task of integrating Credit Suisse, the success of which Switzerland depends on, without undermining its strengths. On Tuesday, Reuters also reported that the Bank of England had approved UBS' takeover of Credit Suisse in Britain, a key market for the Swiss lenders racing to close the rescue deal. UBS also secured a temporary green light from European Union antitrust regulators to complete its acquisition of Credit Suisse, but will still have to request clearance under EU merger rules, the European Commission said.
UBS faces investors after shotgun Credit Suisse merger
  + stars: | 2023-04-05 | by ( Noele Illien | ) www.reuters.com   time to read: +2 min
ZURICH, April 5 (Reuters) - UBS (UBSG.S) will seek to reassure shareholders on Wednesday that its unexpected takeover of rival Credit Suisse (CSGN.S) in the biggest bank rescue since the great financial crash can work. Last month, Swiss authorities announced that UBS would buy Credit Suisse in a shotgun merger to stem further banking turmoil after the smaller lender had come to the brink of collapse. After a run on deposits, the Swiss government had turned to UBS, which agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion), while the Alpine state put up more than 200 billion francs of support and guarantees. Now, the bank is looking at how to navigate the mammoth task of integrating Credit Suisse, the success of which Switzerland depends on, without undermining its strengths. The bank's annual general meeting comes a day after executives at Credit Suisse faced their own shareholders and Chairman Axel Lehmann apologised for leading the bank to the verge of bankruptcy.
Newly appointed UBS CEO Sergio Ermotti (R) speaks with UBS Chairman Colm Kelleher during a press conference in Zurich on March 29, 2023. UBS will hold its annual general meeting on Wednesday morning against a fraught political backdrop, following its takeover of fallen rival Credit Suisse last month. New CEO Sergio Ermotti will take the reins on Wednesday after his shock reappointment last week, as UBS takes on the mammoth task of integrating its fallen compatriot's business. Ermotti's return was seen by many commentators as an attempt to restore calm, as the country's long-established reputation for financial stability teeters on the line. Credit Suisse held the final independent AGM in its 167-year history in Zurich on Tuesday, after Swiss authorities brokered an "emergency rescue" in late March, when the bank's share price tumbled and depositors fled en masse.
[1/5] Sergio Ermotti, newly rehired CEO of UBS Group AG attends a news conference in Zurich, Switzerland March 29, 2023. "Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. Reuters GraphicsErmotti had earlier described the task of integrating UBS and Credit Suisse as "urgent and challenging". The Dutch executive was a notable absentee from the announcement of UBS's takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a "sad day" that nobody wanted.
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Ermotti may need to persuade Switzerland's authorities that UBS should keep "the piece de resistance," Credit Suisse's domestic bank, said Porta's Wittmann. During the financial crash of 2008 it was UBS, not Credit Suisse, that took the lion's share of support from the state. One of Ermotti's biggest challenges may be to prevent Credit Suisse's problems contaminating UBS, which will involve hacking back its investment bank and its unwieldy derivatives. Disentangling Credit Suisse's finances, however, is only a part of the problem. "There are clearly parts of Credit Suisse that have had a bad culture.
Boomerang UBS boss ticks several important boxes
  + stars: | 2023-03-29 | by ( Liam Proud | ) www.reuters.com   time to read: +4 min
That’s the best explanation for why Chair Colm Kelleher on Wednesday said the Swiss bank was replacing CEO Ralph Hamers with erstwhile boss Sergio Ermotti. Though the move violates several corporate-governance red lines, it improves the group’s chances of successfully absorbing stricken rival Credit Suisse (CSGN.S). Nor was his hesitant delivery in a call with analysts after announcing the Credit Suisse deal. During his previous spell in charge, UBS held talks with Deutsche Bank (DBKGn.DE) and discussed a merger with Credit Suisse. Ermotti, a Swiss national, led the Swiss bank for nine years, departing in late 2020, and is currently chair of Swiss Re.
UBS announced on Wednesday that the former CEO would replace Ralph Hamers from April 5, as the Swiss bank undertakes the mammoth task of integrating fallen rival Credit Suisse into its business. Incoming UBS CEO Sergio Ermotti on Wednesday said his return to the helm was "a call of duty," as the Swiss veteran takes on the task of restoring order to the country's battered financial reputation . Kelleher emphasized that Ermotti's task — the successful integration of Credit Suisse into UBS — was "essential for both banks' clients, people and investors, for Switzerland and for the global financial system in general." Asked by CNBC during Wednesday's press conference about his motivation for returning to UBS, Ermotti said there was "a call of duty aspect" to his decision. "I'm fully aware that we need to work very hard here to avoid any consequence for the taxpayers in Switzerland.
A bank run took down Silicon Valley Bank on March 10, as depositors withdrew $42 billion in a single day. To embrace a uniquely Silicon Valley ethos that champions boldness, growth and disruption. Silicon Valley Bank held 55% of its customers' deposits in long-dated bonds whose value eroded as interest rates went up. Silicon Valley Bank held an unusually large proportion (55%) of its customers’ deposits in long-dated Treasuries. And for most of that year, Silicon Valley Bank was operating with a massive vacancy in its corporate leadership team: a chief risk officer.
Pascal Mora | Bloomberg | Getty Imageswatch nowHowever, the downward spiral of Credit Suisse's share price and mounting asset outflows were underway long before the collapse of Silicon Valley Bank earlier this month. Swiss regulator FINMA has come under fire for allowing the situation to deteriorate as the bank spent years mired in losses and scandal. Mark Yallop, chairman of the U.K.'s Financial Markets Standards Board and former U.K. CEO at UBS, told CNBC on Tuesday that he agreed with the broad assessment that Credit Suisse's downfall was "idiosyncratic." "It's unfortunate that the problems with some of the smaller U.S. banks in the last two or three weeks happened at the same time as this issue with Credit Suisse but the two are completely different and very largely unrelated," he said. By contrast, the Swiss banking and regulatory system has come under fire.
But combining Credit Suisse into UBS could take much longer, potentially months, because the deal needs approval from regulators in tens of countries, the people said, seeking anonymity given the sensitivity of the matter. Spokespeople for UBS and Credit Suisse declined to comment. The longer the deal takes to close, the harder it will be for Credit Suisse to hold on to its business as the uncertainty erodes confidence in the lender. Bank of America's electronic stocks desk had halted trading with a desk at Credit Suisse that uses computer-led strategies, an email seen by Reuters on Monday said. Bloomberg News reported on Thursday that Wall Street banks and European firms are lifting hiring freezes to lure staff from Credit Suisse.
Swiss regulator FINMA on Thursday defended its decision to instruct Credit Suisse to write down its AT1 bonds — a controversial part of the lender's emergency sale to UBS — saying it was a "viability event." The regulator said the loan Credit Suisse received from the Swiss National Bank last week, backed by the federal government, meant the conditions for a writedown had been met. The regulator instructed Credit Suisse to write down 16 billion Swiss francs of AT1 bonds, widely regarded as relatively risky investments, to zero, while equity shareholders will receive payouts at the stock's takeover value. "As Credit Suisse received extraordinary liquidity assistance loans secured by a federal default guarantee on 19 March 2023, these contractual conditions were met for the AT1 instruments issued by the bank." The Swiss federal government enacted an emergency ordinance to guarantee the additional liquidity assistance from the SNB to Credit Suisse, in order to ensure the successful implementation of the UBS takeover.
London CNN —The last-minute rescue of Credit Suisse may have prevented the current banking crisis from exploding, but it’s a raw deal for Switzerland. An aerial view of the headquarters of Credit Suisse, center, and UBS, left, at Paradeplatz in Zurich, Switzerland on Sunday, 19 March, 2023. Credit Suisse is “part of Switzerland’s identity,” said Hans Gersbach, a professor of macroeconomics at ETH university in Zurich. “The Credit Suisse Swiss bank is a fine asset that we are very determined to keep,” Kelleher said Sunday. Integration is difficultAt $3.25 billion, UBS got Credit Suisse for 60% less than the bank was worth when markets closed two days prior.
Credit Suisse staff have swamped recruiters across the globe amid the UBS deal, per Bloomberg. It said one recruiting firm had 30 calls on Monday, while another spoke to 20 bankers since last week. The day after Credit Suisse and UBS announced the acquisition deal, a recruiting firm in Singapore received around 30 inquiries from mostly Credit Suisse private bankers, the people told Bloomberg. A headhunter based in London told Bloomberg that Credit Suisse staff flooded him with calls over the weekend. They added that Credit Suisse will "do everything we can to ensure an orderly transition and to serve our clients as best as possible."
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