FTSE 100
Dow Jones

Monday, 3 August 2009

All's well that ends well, if not for the customers

One event that I forgot to mention, due to a busy weekend is that UBS and the US government managed to settle their disagreement just before the weekend.

As you may recall the US had already imposed a massive fine on the Swiss bank and was demanding that the Swiss bank should release the identities of 52,000 US citizens with accounts at the bank.

"No, no, no," said the Swiss government. "We can't allow UBS to do that. We have laws that promise bank secrecy and we have principles you know."

"OK", said the US government, "give us the top 5,000 names and we will forget the rest."

"Fine", replied the Swiss government, "you have a deal."

"What about your principles?" asked the US tax payers.

"We just looked through your files, and it looks to us as though you may have been engaging in tax fraud" answered UBS, "we are shocked, really shocked."

"But you were the guys who sold us the deal in the first place" replied the tax payers.

"Yes, but now we have principles, and if those don't work out we may have some more next week".

I only bring this up because UBS, which would have done us all a favour if it had stopped growing in 1912 after Bank in Winterthur (founded in 1862) merged with Toggenburger Bank (founded in 1863), announces its second-quarter results today.

The best guess is that it has reduced its underperformance from a CHF 4 billion loss last year to a mere CHF 1 billion this year, but with an expected flight of hot money out of UBS, who can guess what that number might be next year?


Demetrius said...

So while all this has been going on the UBS must have been losing a lot of customers, fast. What has this done to the accounts? Did someone have to whisper in the ear of someone else that there could be another nasty crisis if UBS fell off the mountain?

Demetrius said...
This comment has been removed by the author.