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  #581  
Old 21.10.2008, 11:10
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Hi Shorrick Mk2,

Any info on this - links or a quick résumé - for those of us who missed it? I'd be interested to find out what happened.

Cheers,
GenevaSculler
Pretty much like UBS the BCG had to expunge in 2000 5.3 billion CHF of toxic assets (NPLs and unsecured or unprovisioned mortgage loans). These were transferred to a public foundation guaranteed by the Canton of Geneva up to a 5 billion CHF treshold.

The foundation liquidates the assets little by little, and the losses are written off by the Canton. By end 2005 the losses amounted to ca. 1 billion, and they're around the 1.7 billion mark now although admittedly I haven't seen the latest figures. If you wonder where the 1.7 billion came from - wait till you receive your tax bill...

This is why I consider as criminal recklessness hustling to no end cantonal banks which are supported by cantons where the financial sector is the mainstay of fiscal income. Because it has happened - and it can happen again. It's not a 25 standard deviations event.
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  #582  
Old 21.10.2008, 11:30
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Pretty much like UBS the BCG had to expunge in 2000 5.3 billion CHF of toxic assets (NPLs and unsecured or unprovisioned mortgage loans). These were transferred to a public foundation guaranteed by the Canton of Geneva up to a 5 billion CHF treshold.

The foundation liquidates the assets little by little, and the losses are written off by the Canton. By end 2005 the losses amounted to ca. 1 billion, and they're around the 1.7 billion mark now although admittedly I haven't seen the latest figures. If you wonder where the 1.7 billion came from - wait till you receive your tax bill...

This is why I consider as criminal recklessness hustling to no end cantonal banks which are supported by cantons where the financial sector is the mainstay of fiscal income. Because it has happened - and it can happen again. It's not a 25 standard deviations event.
Thanks. I can see where you are coming from...!
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  #583  
Old 21.10.2008, 12:51
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

According to Blick today (maybe not the best source) If you have a bank account with over 30K CHF & a mortgage in your name with the same bank - should the bank fail then what you lose (over the 30K limit) can be offset against your outstanding mortgage debt.

Anybody know if this is correct?

Marton
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  #584  
Old 21.10.2008, 14:08
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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According to Blick today (maybe not the best source) If you have a bank account with over 30K CHF & a mortgage in your name with the same bank - should the bank fail then what you lose (over the 30K limit) can be offset against your outstanding mortgage debt.

Anybody know if this is correct?

Marton
Doubt that it is so simple! The mortgage collateral is an asset. The Liquidator may sell that to another Financial Institution, which then takes on the mortgage. The liquidated assets are then used to pay off the liabilities. Here there is a pecking order that puts employees (salaries, pension plans, etc.) first.
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  #585  
Old 21.10.2008, 14:10
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Concur. Proximity minimises jack sh!t - witness the debacle of Geneva and Vaud cantonal banks a few years ago.
Guess the problem there was too much proximity! Bad loans were made to political cronies?
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  #586  
Old 21.10.2008, 14:11
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Surely the offer is also made to you to buy back this asset? Don't see why not?
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  #587  
Old 21.10.2008, 14:43
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Guess the problem there was too much proximity! Bad loans were made to political cronies?
Bad loans were made to every one whose breath could fog a mirror. There aren't enough cronies in Geneva to burn through 5.3 billion of loans.

And before you blame it on the french roots, we copied the rescue model from the Berner Kantonalbank...
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  #588  
Old 21.10.2008, 14:43
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Doubt that it is so simple! The mortgage collateral is an asset. The Liquidator may sell that to another Financial Institution, which then takes on the mortgage. The liquidated assets are then used to pay off the liabilities. Here there is a pecking order that puts employees (salaries, pension plans, etc.) first.
Yes, that is what I thought.

Marton
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  #589  
Old 21.10.2008, 18:16
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Bad loans were made to every one whose breath could fog a mirror. There aren't enough cronies in Geneva to burn through 5.3 billion of loans.

The ironic thing is that the lending culture inside Switzerland was still pretty conservative - lenders and borrowers.

Too bad the banks got greedy and bought into US mortgage backed securities.

As for the probity of British lending and the attitudes to borrowing stupid amounts of cash, check these 'sob stories' out. Spotted on the BBC News site:

http://news.bbc.co.uk/1/hi/business/7680498.stm

Dunno about you but my first thought was "What were the banks thinking?".
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  #590  
Old 21.10.2008, 18:29
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Just wait until the UK 0% interest introductory credit card rate merry-go-round comes screeching to a halt. There will be another wave of big write-downs at UK banks. The only question is will the banks keep passing the debt around amongst themselves by continuing to offer 0% balance transfers so they never have to think about write-downs...somehow, I think this will hit 12 months or so after the bulk of the mortgage defaults.

I'm sure the same thing is looming in the US as well.
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  #591  
Old 21.10.2008, 18:31
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Perhaps the Swiss, ered when they strayed from thier conservative lending root. My ancestors, had a family fund which they dipped into and added to, to build bsiness around the lake of Lucerne. I have gone back to a family way of doing things, at least then if I get ripped off I know who to go after, alhtough I would probably take pity. Nepotism- keep it in the family.
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  #592  
Old 21.10.2008, 18:54
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Just wait until the UK 0% interest introductory credit card rate merry-go-round comes screeching to a halt. There will be another wave of big write-downs at UK banks. The only question is will the banks keep passing the debt around amongst themselves by continuing to offer 0% balance transfers so they never have to think about write-downs...somehow, I think this will hit 12 months or so after the bulk of the mortgage defaults.

I'm sure the same thing is looming in the US as well.
I am having a Little Britain, Vicky Pollard moment here in that OMG, you are so right. I heard this finance advice program the other day where they advised someone to use a 0% card to pay off the other debts and then keep switching them 'round. The only problem is, that the bank could change their mind at any tme. Then what would happen? Could you imagine if students were tempted to take out US college loans on thier credit cards, becuase the student loan company didn't pay??? I am buying futures shares in debtor's prisons, maybe then I will get preferential treatment.

We could build a debtor's prison on Canary Wharf and rename it Isle of Dogs.
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  #593  
Old 21.10.2008, 19:01
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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The ironic thing is that the lending culture inside Switzerland was still pretty conservative - lenders and borrowers.

Too bad the banks got greedy and bought into US mortgage backed securities.
Gav, this goes to the heart of what went wrong. The universal banks with large deposit and asset management businesses tied to an investment bank lost sight of who they were. They forgot their roots. Everybody saw the money Goldman Sachs was making by turning themselves into a proprietary hedge fund and everybody wanted a piece of that action. Punting shareholders' capital was only part of it. Savers/depositors were seen as a "pipeline" down which the investment bank could pump high margin, structured products to maximise profits. Global market share, not client satisfaction became their yardstick. In the end that strategy failed shareholders, depositors and asset management clients. Not to mention the army of employees who don't earn mega bucks and will likely lose their jobs as a result of the downsizing across the industry
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  #594  
Old 21.10.2008, 19:01
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

I'm pretty sure they can't withdraw the 0% rate unless you break the contract.

You could actually use these offers to seriously reduce your mortgage a while back when balance transfers were free and there were lots of them around (so you could hop from one to another).

Easiest way was to get an Egg credit card (a mix of credit card and eBanking) and simply 'balance transfer' off of a new 0% credit card to the Egg account. Then move the resulting cash to either a savings/investment vehicle or an offset mortgage account.

So long as you settled the balance in full at the end of the 0% period (typically 12 months, sometimes up to 18 months) and could meet the minimum monthly repayments, money for nothing!


Personally, I'm amazed that credit card borrowing is still so lax, given how much mortgages and loans have tightened up. Once it gets tightened, the UK economy is indeed toast.
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  #595  
Old 21.10.2008, 19:10
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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According to Blick today (maybe not the best source) If you have a bank account with over 30K CHF & a mortgage in your name with the same bank - should the bank fail then what you lose (over the 30K limit) can be offset against your outstanding mortgage debt.

Anybody know if this is correct?

Marton
It all depends on what your agreements say, I have yet to see a Swiss mortgage agreement that did not exclude the right to off set balances in the client's favour.

When I took out a mortgage a few years ago I refused to sign the agreement until the clause was removed - after much 'discussions' they eventually agreed to it and gave me a 'special' contract. But I expect that few people do this....


Jim
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  #596  
Old 21.10.2008, 19:25
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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Because private depositors will continue to withdraw money from UBS; consequently every quarter UBS will report significant outgoings.
Then corporate & large investors will get nervous & withdraw money from UBS; consequently every quarter UBS will continue to report significant outgoings.
& so the downward spiral will continue.

Marton
And you really thing that UBS will simply stand by and watch this happen... of course not! They are still taking on new client advisors and new advisors bring new clients an so the party goes on! There is no doubt that it will take a few years to regain their position, but I have no doubt that they will.

Jim
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  #597  
Old 21.10.2008, 20:48
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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And you really thing that UBS will simply stand by and watch this happen... of course not! They are still taking on new client advisors and new advisors bring new clients an so the party goes on! There is no doubt that it will take a few years to regain their position, but I have no doubt that they will.

Jim
I hope UBS will regain their position; the fact is that at the moment they report net outflows.

Marton
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  #598  
Old 22.10.2008, 00:06
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

Mervyn King, Bank of England governor, tonight gave his gloomiest assessment of Britain’s economic prospects saying that the country was now “entering a recession”.

He compared the recent capital flight from British banks with a “mild form” of a 1990s-style emerging market crisis, warning about the risk of another sharp decline in sterling and an even deeper recession.

Marton
Who was talking about movimg their francs into GBP?
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  #599  
Old 22.10.2008, 00:13
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

I don't think this video has been posted yet...Stephen Colbert debating the bailout with Stephen Colbert in a segment entitled, "Formidable Opponent - Business Syphilis"...definitely must-see TV...

(sorry, it's not on YouTube and I don't know how to embed any other kind of video...anyone want to give some pointers? is this even possible?)
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Old 22.10.2008, 00:20
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Re: Financial Crisis Bank News [was: How Safe is UBS?]

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According to Blick today (maybe not the best source) If you have a bank account with over 30K CHF & a mortgage in your name with the same bank - should the bank fail then what you lose (over the 30K limit) can be offset against your outstanding mortgage debt.

Anybody know if this is correct?

Marton
You haven't quoted the full article. There are various conditions. Only the party/parties quoted in the mortgage can offset against their credits elsewhere. Therefore if only Daddy has the mortgage then Mommy and the kids can't benefit beyond the standard 30k per institution/group.

This was the scenario in the question answered in Blick where a one family member wrote in talking about their family having a mortgage and various family accounts in the same bank.

Care to rephrase your question?
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