UBS Lists “Red Lines” for Credit Suisse Bankers
As UBS prepares to take over Credit Suisse, it has compiled a list of about 20 “red lines” that ban Credit Suisse bankers from a range of activities in a bid to de-risk the transaction. The list prohibits various activities, including taking on high-risk clients from countries such as Libya, Russia, Sudan, and Venezuela, and launching new products without UBS executives’ approval. Ukrainian politicians and state-owned enterprises will also be blocked to prevent potential money laundering. The bans are written by UBS’s compliance department and aim to protect against “cultural contamination.” UBS Chairman Colm Kelleher said last month that they would have “an incredibly high standard” for Credit Suisse staffing, and the measures are designed to de-risk the transaction, which was orchestrated by Swiss authorities three months ago to save Credit Suisse from bankruptcy.
Top Stories
1. EU Funds managed by Odey Asset Management are said to be discussing restrictions on investors’ withdrawals as part of emergency measures to contain the fallout from sexual misconduct allegations against the founder of the hedge fund manager.
2. Andreessen Horowitz is betting that the UK government will create a more hospitable climate for blockchain start-ups, and has chosen London for its first office outside the US amid US financial regulators’ crackdown on cryptocurrencies.
3. The Dutch government plans to screen international students after some universities excluded some Chinese graduates from top tech degrees over fears it could pose a risk to national security.
4. Lex Greensill and four former Credit Suisse bankers are named as suspects in a Swiss criminal case that should be formally opened this month, linked to the collapse of a $10bn pool of funds.
5. Ukraine announces the liberation of at least three villages and said it had breached Russia’s defences, as the Kiev counter-offensive aims to liberate about 18% of the occupied territory in the South-Eastern regions.
Additional piece
The banking sector has undergone significant changes throughout the years. The financial crisis of 2008 forced many banks to rethink their strategies and change their approach to doing business. The COVID-19 pandemic was another catalyst for change, with many banks switching to remote working, digital options, and online banking. One of the major changes in the banking sector that has caught attention recently is mergers and acquisitions.
Mergers and acquisitions have risen rapidly over the past few years, and the trend does not seem to be stopping anytime soon. The UBS and Credit Suisse merger is one of the examples of a merger in the banking sector. However, mergers can have a range of outcomes depending on the companies involved, their motivations, and the industry in which they operate.
Mergers and acquisitions can result from various factors, including a need to diversify, reduce costs, acquire new technology, or expand geographically. However, mergers can also be driven by the need to boost their other capabilities for a short-term fix. In most cases, they lead to job losses and redundancies as banks try to cut costs, but in essence, they are designed to bring greater efficiency, growth, and profitability to the bank.
In conclusion, mergers and acquisitions are a common occurrence in the banking sector, with the UBS and Credit Suisse merger serving as a recent example. While mergers and acquisitions can bring a range of benefits, they also have their challenges, including job losses and redundancies. It remains to be seen how the UBS and Credit Suisse merger will play out in the long term, but it highlights the ongoing trend of consolidation in the banking sector.
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Our top story today is on UBS, which has compiled a list of nearly two dozen “red lines” prohibiting Credit Suisse bankers from a range of activities in a bid to de-risk as it prepares to take over its ailing rival as early as today.
Prohibited activities include taking on clients from high-risk countries such as Libya, Russia, Sudan and Venezuela and launching new products without the approval of UBS executives, according to people familiar with the measures. Ukrainian politicians and state-owned enterprises will also be blocked to prevent potential money laundering.
“We are concerned about ‘cultural contamination,'” UBS chairman Colm Kelleher said last month of the Credit Suisse staffing. “We will have an incredibly high standard for who we bring to UBS.”
The bans, written by UBS’s compliance department, are designed to de-risk the transaction, which was orchestrated by Swiss authorities three months ago to save Credit Suisse from bankruptcy.
Here’s what else I’m keeping an eye out for today:
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BORN: Secretary General Jens Stoltenberg visits US President Joe Biden at the White House to discuss the military alliance summit in Vilnius, Lithuania next month, where the war in Ukraine will be high on the agenda.
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Economic data: The United States publishes the balance of the federal budget.
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Results: This was reported by the US software company Oracle.
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Day of Russia: The financial markets are closed in the country.
Do you work in consultancy? Tell us more about your working life in this FT survey.
Five more top stories
1. Exclusive: EU funds managed by Odey Asset Management are discussing restrictions on investor withdrawals as part of emergency measures to contain the fallout from sexual misconduct allegations against the hedge fund manager’s founder. Read the full story.
2. Andreessen Horowitz chose London for his first office outside the US, betting the UK government will create a more hospitable climate for blockchain startups amid a crackdown on cryptocurrencies by US financial regulators. Read more about the move by the Silicon Valley venture capital firm.
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Related: US business confidence in the UK has fell for the third consecutive year due to Brexit, rising corporate taxes and political turmoil in Westminster, according to new research.
3. Dutch government plans to screen international students after universities exclude some Chinese graduates from top tech degrees over fears it could pose a risk to national security, the latest sign of a tougher stance by EU countries on perceived threats from Beijing after decades of overture. Here are more details on what sparked the concerns.
4. Exclusive: Lex Greensill and four former Credit Suisse bankers named as suspects in Swiss criminal case it should be formally opened this month. The case is linked to the collapse of a $10 billion pool of funds the bank was offering to clients who were connected to the Australian banker’s specialist finance group, Greensill Capital. Read the full story.
5. Ukraine said it had breached Russia’s defenses and liberated at least three villages yesterday in the south of the Donetsk region. The day before, President Volodymyr Zelenskyy had confirmed that the long-awaited Kiev counter-offensive had finally begun, with the they aim to liberate about 18% of the occupied territory in the south-eastern regions.
The big read
© Rory Griffiths/FT/Getty Images
With the collective weight of the US Federal Reserve’s vigorous monetary tightening efforts to date and the withdrawal of regional lenders across the country in the wake of a series of bank failures, there is growing concern that the The resilience of the US economy is finally starting to crack.
We are also reading. . .
Chart of the day
A majority of economists polled by the Financial Times expect the US Federal Reserve to do so raise its benchmark rate to at least 5.5% this year. Federal funds futures markets suggest that traders prefer just one more quarter-point rate hike in July.
Take a break from the news
Former French President François Hollande sits down with editor Roula Khalaf at a lunch with the FT to discuss French politics, the war in Ukraine and relations with the Kremlin. “Putin cannot be seduced,” Hollande said. “Respect the force.”
©James Ferguson
Further contributions by Benjamin Wilhelm e Gordon Smith
https://www.ft.com/content/c0d3ec25-7e07-4d5f-81f4-7e2c8a2a49f2
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