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Old 19.01.2008, 14:18
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bank safety

I was wondering if there is some kind of insurance protecting banking customers if a swiss bank closes down.

For example, in the U.S. due to the great depression the government insures accounts up to 10,000

Is there a swiss equivalent
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Old 19.01.2008, 14:27
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Re: bank safety

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I was wondering if there is some kind of insurance protecting banking customers if a swiss bank closes down.

For example, in the U.S. due to the great depression the government insures accounts up to 10,000

Is there a swiss equivalent
Depositor protection. I recently asked UBS about this.

Current accounts and money market accounts. Basically nothing/peanuts, most of these limits were set when they were a reasonable amount that would protect the average saver.

Investment funds. Depends but mostly the assets are not in the custody of the bank but of the respective fund vehicles, so it is rather the solvency of those than the bank you would need to worry about.

Daniel

Last edited by dannyt986; 19.01.2008 at 19:54. Reason: Forgot part of msg.
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Old 19.01.2008, 14:32
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Re: bank safety

Thanks for your quick response.
Do you have a ballpark figure for the amount of peanuts that is covered.
Thanks
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Old 19.01.2008, 17:07
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Re: bank safety

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Depositor protection. I recently asked UBS about this.

Current accounts and money market accounts. Basically nothing/peanuts, most of these limits were set when they were a reasonable

Investment funds. Depends but mostly the assets are not in the custody of the bank but of the respective fund vehicles, so it is rather the solvency of those than the bank you would need to worry about.

Daniel
I was under the impression , current and saving accounts are in the custody of the bank and bonds/money market accounts are invested outside and hence they do not depend totally on the safety of the bank. Can you please elaborate your input more in order for me to understand better.

Thanks in advance for your useful input.
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Old 19.01.2008, 20:00
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Re: bank safety

I must admit my knowledge is virtually nonexistent when it comes to finance.
I was just wondering if any protection exists for a general savings account with atm card here in switzerland. Thanks for the follow up
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Old 19.01.2008, 20:02
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Re: bank safety

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I was under the impression , current and saving accounts are in the custody of the bank and bonds/money market accounts are invested outside and hence they do not depend totally on the safety of the bank. Can you please elaborate your input more in order for me to understand better.

Thanks in advance for your useful input.
Im not an expert by any stretch. But basically it depends who the counterparty is. With a current account it's the bank.. ie you lend them money and get services/interest in return. If they run out of money... you're stuffed. With funds the bank will invest it on your behalf with another counterparty and your money is in a custody account at the bank, so if the bank needed money they could not (legitimately) access those investments.

Money market accounts can be either/or you need to check. A further advantage of an external MM account is that you can get the interest gross, but you might get a bit less interest.

Daniel
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Old 20.01.2008, 06:29
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Re: bank safety

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I was wondering if there is some kind of insurance protecting banking customers if a swiss bank closes down.

For example, in the U.S. due to the great depression the government insures accounts up to 10,000

Is there a swiss equivalent
Yes, the equivalent protection in Switzerland is CHF 30,000 (approx. $30,000) per person. The depositor should be paid within 90 days if a bank (or non-bank securities dealer) goes into bankruptcy. This is funded by a minimum CHF 4 billion pool since 01.01.06 & is administered by the Swiss Bankers Association under the purview of the Swiss Federal Banking Commission (federal regulator).

You can find a summary in english & the actual legislation (german, french) at
http://www.swissbanking.org/en/home.htm
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Old 27.02.2008, 21:56
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Re: bank safety

Those worried about bank safety should choose a Kantonal Bank. The pertinent canton guarantees solvency. The ZKB (Zürcher Kantonal Bank) is AAA (highest possible) rated.

Investments in mutual funds or money market funds implies another counterparty issuing the fund units. The solvency of that counterparty is not easily determined.

When the MF is an equity fund, i.e. investing in stocks, then there is market risk, which is much higher than the counterparty risk of a Swiss bank. Even bond funds are risky being exposed to counterparty and interest-rate risk.

No risk, no gain!
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Old 27.02.2008, 23:08
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Re: bank safety

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Those worried about bank safety should choose a Kantonal Bank. The pertinent canton guarantees solvency. The ZKB (Zürcher Kantonal Bank) is AAA (highest possible) rated.

Investments in mutual funds or money market funds implies another counterparty issuing the fund units. The solvency of that counterparty is not easily determined.

When the MF is an equity fund, i.e. investing in stocks, then there is market risk, which is much higher than the counterparty risk of a Swiss bank. Even bond funds are risky being exposed to counterparty and interest-rate risk.

No risk, no gain!
Thanks for your valuable information.

How does one go about finding a rating on a bank, and is this done by an independent party.
Also, do all cantonal banks gurantee solvency, just asking because I am in Lausanne
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Old 28.02.2008, 19:03
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Re: bank safety

There are several independent international rating agencies that rate financial organizations and instruments. As far as I know, only the ZKB and Bank Sarasin in Basel are AAA rated in Switzerland.

ZKB is guaranteed by the Canton of Zürich, which is financially very strong. Not all Swiss Cantons are equally strong. Some are burdened by public debt. Nevertheless, it is inconceivable that a Cantonal bank, essentially "nationalized" would ever be allowed to go down.

ZKB has a good network in Zürich, Their systems, services and products are good, albeit offering lower interest rates. The ZKB profits flow back to the communes in Zürich. Those revenues help lower taxes in ZH.
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Old 02.03.2009, 17:37
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Re: bank safety

Hi

The best and safest place for you to have you money is offshore 90% Government backed Investor Protection!
Let me know if you want to no more.

Scott
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  #12  
Old 02.03.2009, 17:49
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Re: bank safety

Since October 2008 both UBS and Credit Suisse have government backed guarantees of up to CHF 100k per person.

HTH
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Old 02.03.2009, 18:58
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Re: bank safety

I negotiated a right of offset between my mortgage and assets with the Swiss bank I use ie if they go bust, I can reduce my outstanding mortgage by the funds I had with them.

D
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Old 04.03.2009, 14:28
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Re: bank safety

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There are several independent international rating agencies that rate financial organizations and instruments. As far as I know, only the ZKB and Bank Sarasin in Basel are AAA rated in Switzerland.

ZKB is guaranteed by the Canton of Zürich, which is financially very strong. Not all Swiss Cantons are equally strong. Some are burdened by public debt. Nevertheless, it is inconceivable that a Cantonal bank, essentially "nationalized" would ever be allowed to go down.

ZKB has a good network in Zürich, Their systems, services and products are good, albeit offering lower interest rates. The ZKB profits flow back to the communes in Zürich. Those revenues help lower taxes in ZH.
An even better alternative to the Kantonal Banks would be imho PostFinance for those looking for safety, they have an official state guarantee. Besides PostFinance is a finance institute, not a bank, this implies their their risk-taking is limited.

PostFinance has a pretty large network of bancomats and officies. Compared to the cantonal banks and other swiss banks they offer cheaper products (payment services, credit cards, accounts) and a little higher rates to deposits.

Btw, the rating of Lehman Brothers was triple A before it crashed, wasn't it?
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Old 05.03.2009, 21:00
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Re: bank safety

PostFinance does not have a full range of services. Hence, some people would need a Kantonal Bank, too.
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Old 05.03.2009, 21:11
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Re: bank safety

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I was wondering if there is some kind of insurance protecting banking customers if a swiss bank closes down.

For example, in the U.S. due to the great depression the government insures accounts up to 10,000

Is there a swiss equivalent
Not that it's truly relevant to your question, but the insured amount in the US is actually 250'000 dollars.

http://www.fdic.gov/consumers/banking/facts/index.html

And as MarieZug noted, the current protection on Swiss (not just UBS / CS according to the info I can find) accounts is 100'000 CHF.

http://www.efd.admin.ch/dokumentatio...n&msg-id=22499

Cheers
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Old 05.03.2009, 21:49
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Re: bank safety

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Not that it's truly relevant to your question, but the insured amount in the US is actually 250'000 dollars.

http://www.fdic.gov/consumers/banking/facts/index.html

And as MarieZug noted, the current protection on Swiss (not just UBS / CS according to the info I can find) accounts is 100'000 CHF.

http://www.efd.admin.ch/dokumentatio...n&msg-id=22499

Cheers
i m glad to know that...
as i just opened an account with UBS...
My deutsch is almost at zero level... and according to my agent, only UBS and CS offered e-banking in english.. kantonal banks are all in German.

about postfinance, do i need to have my permit before i can open an account? with UBS, it is ok... as my company is having special arrangement with UBS to let me hav an account without my permit.
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Old 06.03.2009, 19:13
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Re: bank safety

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PostFinance does not have a full range of services. Hence, some people would need a Kantonal Bank, too.
well, at least for those who don't need the full range of services, this the best deal... the basics such as girokonto, all kind of payments, internet banking, debit and credit cards are covered.
do you have have a certain service in mind which is not covered?
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Old 06.03.2009, 19:25
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Re: bank safety

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i m glad to know that...
as i just opened an account with UBS...
My deutsch is almost at zero level... and according to my agent, only UBS and CS offered e-banking in english.. kantonal banks are all in German.

about postfinance, do i need to have my permit before i can open an account? with UBS, it is ok... as my company is having special arrangement with UBS to let me hav an account without my permit.
to get an account with postfinance you need an "official" address in Switzerland or in one of its neighboring countries. you can have all the correspondence and online-banking in English.
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Old 06.03.2009, 22:42
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Re: bank safety

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well, at least for those who don't need the full range of services, this the best deal... the basics such as girokonto, all kind of payments, internet banking, debit and credit cards are covered.
do you have have a certain service in mind which is not covered?
PostFinance (PF) is sufficient for me.

PF has no bank license. PF outsources mortgages and 3a to UBS. Mutual Funds are outsourced, too, from Banks. Outsourced services are not state guaranteed.

PF does not offer company founding accounts. May not offer company and project financing. Possibly not well networked internationally.

PF is weak on investment advice.

For basic services, PF is very good. Low fees. High interest rates on deposits.

Hence, I suggest the combo PF + KB.
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