If you need a bigger guarantee then the Kantonal Banks (e.g. Zurich Kantonal Bank) are guaranteed by the Kanton & the Swiss Post Office is guaranteed by the Government. In all cases the guarantee is not limited - (maybe some of the smaller Kantons have a limit (?) ) - you should check the small print for any one you choose to be sure what the guarantee is.

Marton

Cough cough. Not all cantonal are guaranteed. And surely not unlimited guarantees.

I did write "you should check the small print for any one you choose to be sure what the guarantee is"

In the ZKB web site it states
"Cantonal guarantee
Under the law, the canton bears responsibility for all Zürcher Kantonalbank's liabilities should the bank's resources prove inadequate. This cantonal guarantee acts as a stabilising force for the financial market as a whole, particularly in times of economic uncertainty. "

What do you think this Cantonal Guarantee means?

Marton

I think the ZH Cantonal Guarantee means exactly jack $h!t (pardon my french) in times of "economic uncertainty" as the Zurich cantonal budget is going to be plastered by the huge losses UBS, CS and other lesser ZH-headquartered financial institutions incur in "times of economic uncertainty" - so unless the canton can print its own money (mmm, unlikely) they won't really have much left to pay you with. Unless you give them some by means of a tax rate increase.

But you're welcome to go ahead and try it for yourself.

With all the advertised doom and gloom, shares plummeting etc, should one be worried about one's cash in, say UBS? I understand there is a certain limit that is prtected under law......

I think we need to make this question a sticky......

You are protected for a total of up to CHF 30'000 per bank (does not matter if you have one or several accounts).

Only the Cantonal banks and the PostFinance are guaranteed/backed 100% by the Government.

Safety deposit boxes etc. are of course protected in the case of a problem.

Hope this helps.

Which cantonal banks and which Government?

But Shorrick Mk2's comment from an earlier, similar thread should be taken into consideration, too... (sorry to poach someone elses post but it seems relevant).

Financial Crisis Bank News [was: How Safe is UBS?]

As I read the article today it was each Cantonal bank and the Federal Government was the backer. It could be that the Cantonal banks are backed by the specific Canton and the PostFinance by the Federal Government. Both were mentioned in the same sentence.

I will see if I can find the specific reference. If I find it I will post it.

The multimats in Zug were busy at lunch time today. At the counter, the lady in front of me asked for all her money and walked out with it in her handbag.

Here is the link to the CHF 30'000 number.

http://www.ebk.admin.ch/e/ebk/taetig...etigkeit5.html

I can't get access to the magazine that the article referenced to check the specific wording of who backs the Cantonal banks. You have to be a subscriber to get details on the current issue of the magazine (I am not).

I see from the other thread that you already have the answer to who backs the Cantonal banks (the specific Canton).

Funny that you ask this question now. I just transferred most of my cash from UBS to Kantonalbank 2 minutes ago.

Do I believe that UBS could go bust? No, I don't. Would I have believed that Lehman and AIG could go bust and Merrill would be bought by Bank America 4 weeks ago? No, I wouldn't. Somehow, I just feel better now.

UBS stock is down around 30% since yesterday - worse hit than many other financials which is not a good sign (the market is usually quite intelligent).

If UBS dump the IB division (which is being made more autonomous), then it becomes a retail bank again. It's still the biggest wealth manager in the world.

And UBS are still well capitalised.

Lehman, Bear Stearns and Merrill don't have these other divisions (I'm sure I'll be corrected if I'm wrong)

Frankly, if UBS did go tits up then you'd be close to using your CHF notes to w1pe your bum and buying your groceries with toilet roll.
The combined assets of CS and UBS are 9 times Swiss GDP.
Swiss banks and GBP

Merrill has an army of about 17'000 Financial Advisors in its onshore brokerage (i.e. wealth management) unit. Don't forget "Bring Wall Street to Main Street" and "Thundering Herd".

I think Merrill does have some quite substantial wealth mgmt as well. Maybe that's why Bank of America bought them (to combine with their domestic retail banking).

I think the issue for banks in the situation of UBS now is not just capitalization but the fact that they cannot get anymore short term financing which can put liquidity under pressure.

However, I totally agree with you - in case UBS goes bankrupt it doesn't matter where your CHF are - the whole country would be paralyzed. I would imagine that in the worst case there would be a creative solution with CS to save at least the retail and private banking within CH.

I hope it's not one of those having exposure to Lehman-backed structured products and derivatives.

It sounds like you arent particularly optimistic.

These markets certainly are crazy. Quite apart from my long suffering long position in UBSN, I do indeed worry about the bank going bankrupt.... it shouldnt of course, but given the spate of recent events, nothing is impossible!

krlock3.

Glad you agree the Kantonal guarantee is unlimited.
I don't believe a reduction in tax income in one year would impact the Kanton's ability to meet liabilities. In extremis, they could always call on federal help.

Anyway they would not have to provide the actual cash shortfall but simply guarantees of covering interest payments for account holders to borrow sufficient funds to cover their deficits.

Marton

The ZKB is AAA rated. There are only very few banks, anywhere in the world, with that very high rating. Moreover, because the ZKB is state-owned, they do not indulge in reckless and speculative transactions. And there is no sign of a housing price bubble in Zurich, which might impact the ZKB.

If you live in ZH, then you are part-owner of the ZKB. The profits are distributed to the ZH communes and helps infrastructure projects. So for patriotic, pecuniary and safety reasons, there is no better choice.

Declaration of vested interest: I reside in Zurich and am a beneficiary of ZKB prosperity.