Archive for November, 2009

UBS threatens to move HQ from Switzerland: report (Reuters)

Sunday, November 29th, 2009 | Finance News

GENEVA (Reuters) –
Swiss bank UBS (UBSN.VX) is threatening to move its headquarters out of Switzerland if the authorities impose too many new regulations in the wake of the global financial crisis, Swiss weekly paper Sonntag CH said.

Oswald Gruebel, chief executive of Switzerland's biggest bank by assets, made the threat in a speech to businessmen last week, citing the possibility that the authorities would force major banks to reorganize as holding companies, the paper said on Sunday.

A UBS spokeswoman declined to comment on the report.

Gruebel spoke to the Zurich Business Club on Thursday at a closed-door event at which reporters were not present.

The idea of forcing banks in Switzerland to operate as holding companies is part of the discussion on supervising banks deemed "too big to fail."

Switzerland's relatively small economy is dominated by two mega-banks, UBS and Credit Suisse (CSGN.VX).

Swiss National Bank Vice-Chairman Philipp Hildebrand, noting total banking assets are more than seven times the size of Swiss gross domestic product, said earlier this month that the country urgently needed tougher regulatory standards than other countries given the relative size of its banks. [ID:nLI129832]

The Swiss government bailed out UBS in October 2008 by injecting 6 billion Swiss francs ($5.95 billion) in return for a stake of some 9 percent, subsequently sold at a profit.

UBS also originally planned to transfer some $60 billion in illiquid assets to the central bank, but this was later reduced to $39 billion.

Swiss regulators believe that forcing multinational banks to operate as national institutions in different countries, controlled by a central holding company, would allow the authorities in a crisis to rescue the Swiss company while letting foreign subsidies go under, the paper said.

But such a structure would oblige the bank to inject capital into the subsidiaries, which would be expensive.

In such circumstances it would be logical to move the holding company abroad, the paper quoted Gruebel as saying.

Gruebel is not the only banker to threaten a move.

Bankers and hedge funds in London often say they will move to Switzerland if UK regulation and taxation becomes too oppressive.

($1=1.009 Swiss Franc)

(Reporting by Jonathan Lynn; Editing by Mike Nesbit)


China reaffirms it wants stable, balanced yuan (Reuters)

Sunday, November 29th, 2009 | Finance News

BEIJING (Reuters) –
Premier Wen Jiabao on Sunday restated China's long-standing position that the yuan's exchange rate should be kept at a reasonable, balanced level.

State television showed Wen meeting a trio of top economic officials from the euro zone, who were making the case for a strengthening of the Chinese currency.

Wen also said China wanted to see stability in the world's major reserve currencies -- a thinly veiled way of saying China is unhappy with the weakening trend of the dollar.

(Reporting by Zhou Xin and Alan Wheatley)


Dubai World refused distress-asset sale: report (Reuters)

Sunday, November 29th, 2009 | Finance News

DUBAI (Reuters) –
Dubai World has refused to offload assets at fire-sale prices to repay obligations, forcing it to seek a debt standstill, a newspaper report on Sunday quoted an unnamed source at the government-controlled firm as saying.

Stocks from Tokyo to New York have been haunted by concern that banks were exposed to state companies in Dubai, though world leaders expressed confidence in the global economic recovery on Friday despite the fears.

"The group absolutely refused in the last few months to sell a number of good investment and property assets at low prices," al-Ittihad newspaper said, quoting a source at Dubai World, the holding company at the center of Dubai's debt crisis.

Last Wednesday, the government of Dubai asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel, as it restructured the Dubai World group.

The restructuring is expected to focus on property and foreign investments which have been worst hit by the economic crisis, the source said.

"Asset sales should be commercially fair to meet the group long-term strategic goals, beyond the immediate economic pressures," the source added.

(Reporting by Rania Oteify; Editing by Thomas Atkins and Clarence Fernandez)