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Old 22.05.2013, 07:01
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What Happens If My Stock Broker / Bank Goes Bankrupt?

Hi all,

My wife and I had a disucussion over dinner last night. We are wondering what would happen if our (swiss) bank would go bankrupt. We know that it's unlikely to happen in CH but we would like to understand what safety mechanism exists

As far as I understand, the Swiss Federal Banking commission offers a guarantee of up to 100K,- Is that on your cash balance only ?

What about any stock / bond we hold ? Swissbanks act often as a stockbroker. ie: we use them to buy/sell a stock in companies, if our bank goes bankrupt would our stock over 100K,- vanish or would the share certificate just be transfered back to us ?

Any input and though would be appreciated, banking experts :-)
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Old 22.05.2013, 08:40
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Re: What Happens If My Stock Broker / Bank Goes Bankrupt?

Why not ask your banks?

Last edited by Phil_MCR; 27.05.2013 at 02:14.
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Old 22.05.2013, 10:55
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Re: What Happens If My Stock Broker / Bank Goes Bankrupt?

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Hi all,

My wife and I had a disucussion over dinner last night. We are wondering what would happen if our (swiss) bank would go bankrupt. We know that it's unlikely to happen in CH but we would like to understand what safety mechanism exists

As far as I understand, the Swiss Federal Banking commission offers a guarantee of up to 100K,- Is that on your cash balance only ?

What about any stock / bond we hold ? Swissbanks act often as a stockbroker. ie: we use them to buy/sell a stock in companies, if our bank goes bankrupt would our stock over 100K,- vanish or would the share certificate just be transfered back to us ?

Any input and though would be appreciated, banking experts :-)
Why don't you look at their website (2 clicks from the main page). Stocks are yours, so bankruptcy does not affect your shares. (Pillar 3a may be a problem though, these are not protected, but instead given 'preferential treatment')
http://www.einlagensicherung.ch/en/faq.htm
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Old 22.05.2013, 11:11
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Re: What Happens If My Stock Broker / Bank Goes Bankrupt?

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Which not ask your banks?
Hi EF! I was mugged and had my wallet stolen. Do you think I'll get the family photos inside back? Does that happen?

Phil: "Which not ask your mugger?"
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Old 24.05.2013, 23:29
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Re: What Happens If My Stock Broker / Bank Goes Bankrupt?

Hi,

Working myself for an online broker (Strateo) it is a question we regularily get. You are not exposed to the credit risk of the bank for the securities portfolio you have. These are in a custody account in your name at the bank and are not on the bank's balance sheet, it would be illegal for the bank to use client securities ; they need to be kept in a segregated account. You are exposed to the credit quality of a bank for the total in deposits or cash you hold (or term accounts). There is a guarantee of 100K per account holder (Einlagensicherung.ch) for this.
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Old 27.05.2013, 02:14
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Re: What Happens If My Stock Broker / Bank Goes Bankrupt?

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Hi EF! I was mugged and had my wallet stolen. Do you think I'll get the family photos inside back? Does that happen?

Phil: "Which not ask your mugger?"
good advice. the mugger can probably tell you the correct answer
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