UBS after absorbing Credit Suisse, raises costs on pension funds

Daily Life, Swiss News and General Topics
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Pension funds now forced to pay 0.2% on liquidity.

Funds furious only 2 weeks notice was given and criticise UBS acquisition of CS allowing them to push through changes due to limited competition.

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On the heads of the UBS executives: “Wait, wait…if we are in a ‘power position’ now, why not using it?..”

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It’s a cash management issue.

It also poses a really interesting question: can funds in a bank account be considered cash? The 0.2% fee implies funds in the bank are not cash. A fee is needed to convert a value in a database to cash.

Pension fund holders who park liquid assets with UBS have been paying negative interest again since mid-July – that is, CHF2,000 on CHF1 million held in cash.

UBS confirmed this upon request but said the -0.2% fee is technically not negative interest, but rather a fee that arises because UBS must keep liquidity available for institutional clients at all times. UBS says these additional costs are passed on.

Also, the Swiss National Bank is charging -0.25% to banks since last June:

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UBS did not become too powerful, it became too big to save. Also, too big that it’s probably paying -0.25% for liquidity.

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Pensions funds should not be parking their money in a bank. At least not in a single bank in a single currency.

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Except they do need a certain level of liquid funds to pay their pensioners.

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Now considering leaving Switzerland altogether.

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Now considering leaving UBS forever.

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The run to the exit by wealthy customers in Europe and Asia may have already started. Diversification has several meanings, one of them is not being under US jurisdiction.

Anyway, I hope the New York Post has not triggered something ugly at UBS.

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being familiar with some of the in-fighting within UBS (CH, UK, USA), this is always ‘an option’. But I have doubts that it will really happen. I’m not sure the swiss authorities will allow this for various reasons like national pride, reputation, support given to UBS by the swiss people / authorities, etc.

I think this is more of a ‘scare tactic’ to come to some sort of an agreement between UBS and Swiss authorities. But most anything can happen …

Just my CHF 0.002’s worth …

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Assume it is only coincidence that Blooberg interviewed Ermotti on 9-11?

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The speculation/threat is far from new. It’s half a year old or more.