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Banks of Switzerland – Part II (SBC and UBS)

26 May, 2009

Another part of the web of banks which own the US and a great many other countries of the world, creating an intriguing look at how greed and power can create a new world money order.  Perhaps, the final lynch pin will be the World Bank and International Monetary Fund who grow stronger as world economies grow weaker.  Did these banks have a part in the weakening of the world economy?  That might be the only conspiracy you need to worry about.

I started out just to gather a bit of information about a few banks and I now have a notebook full of information that is boring on the surface but leads to all kinds of connections.  Pick a name and follow it yourself.  See what you can learn about your own bank.  Then come back and let us know.

When I ended my last post the Union Bank of Switzerland and the German bank,  Deutsche Bank, had just formed the UBS-DB Corp with UBS – each bank took a 50% stock in the American branch.  It was 1971.

DATE SBC UBS
1971 Tokyo Offices in Montreal,* San Francisco,* Caracas,* Singapore, and Bahrain
1972 Swiss Bank and Trust Corp. LTD established in the Cayman Islands* A representative office in Chicago and a branch in Tokyo
1974 Branch office in Chicago* Rep office in Madrid and Tehran
1975 Singapore New York Branch;* and a Rep office in Moscow
1976 Majority Holdings in Monte Carlo; an offshore Banking Unit in Bahrain Rep office in Toronto* and Abu Dhabi; a branch in the Cayman Islands. Acquires 56% of share capital of SHHB and renames the bank HYPOSWISS
1977 Branch on the Cayman Islands*
1978 Branch offices in Chicago* and Los Angeles*
1979 Hong Kong Branch in Singapore & a subsidiary in NY* (UBS Securities Inc.)
1980 Swiss Bank Corp International Ltd, London Branch in Hong Kong & rep. office in Houston*

From 1980 until 1995, UBS was the largest bank in Switzerland. Credit Suisse became number one in 1995.

Meanwhile in 1984, SBC‘s former Basle Securities Corp, NY now known as the Swiss Bank Corporation International Securities Inc., NY was listed on the NY Stock Exchange.   During the 1980’s, both banks continued to establish agencies and branches around the world including the Americas.

In 1987, UBS acquired  full control of Philips & Drew, one of the largest stockbrokers in London at the time (here)  and opened an agency in Houston, a subsidiary in Tokyo (Trust and Banking Ltd),  a subsidiary in Sydney (UBS Australia LTD), and  a representative office in Osaka.

In 1989, SBC formed a partnership with a derivative house in Chicago, O’Connor & Associates.

One of the founding fathers of the CBOE [Chicago Board Options Exchange] (one of the first modern financial derivatives exchanges) was Edmund J. O’Connor, who first traded futures on the Chicago Board of Trade (CBOT) in 1953. Together with his brother William, Edmund O’Connor founded O’Connor & Company L.L.C. in 1959.

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From the late 1960s, the brothers – and Edmund in particular – came to play a pioneering role in the modern options market, both as driving forces behind the CBOE and, simultaneously, as founders of Chicago’s first options clearing firm, First Options Corp. However, the O’Connors’ involvement with the evolution of the derivatives market did not end there.  (here)


In 1991, UBS acquired Chase Investors, New York, which it renames
UBS Asset Management (New York) Inc. and established a life insurance subsidiary, UBS Life, which opened for business in 1993.  1993 was the same year in which UBS opened offices in Dubai and Bangkok.

IN 1993, UBS announceed that The Martin Ebner-Group (BK Vision, AG, BZ Group Holding Co) had become the largest shareholder of UBS.  It was at this time, that UBS became the subject of many lawsuits.

During the mid-1990s, UBS came under fire from dissident shareholders, critical of the conservative way the bank was being managed. The main opposition voice was that of Martin Ebner, a maverick financier who founded BK Vision AG in 1991. Through this investment trust, Ebner purchased shares of Swiss banks, including an 18 percent share in UBS–a holding that comprised nearly two-thirds of the overall holdings of the trust. BK Vision thus became the largest shareholder in UBS. Ebner attempted to leverage this holding into forcing changes at the bank, with his main argument being that UBS should reduce its exposure to retail banking and slash its bloated domestic branch network while at the same time ratcheting up its more lucrative operations, particularly asset management. After Ebner attempted to gain control of UBS in mid-1994, the bank responded with a shareholder proposal to unify what had been a two-class share structure, a move that would reduce Ebner’s power. The plan won narrow approval in late 1994, but subsequent lawsuits filed by Ebner–including charging Studer with criminal fraud–delayed the implementation of the share changeover. In 1996 Ebner opposed the election of Studer as chairman of UBS, an effort that failed but that garnered 31 percent of the shareholder votes, an indication of the level of investor dissatisfaction.

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The embattled Studer compounded the bank’s difficulties by mishandling the sensitive issue of dormant bank accounts that had been held by Holocaust victims. Swiss banks had come under heavy criticism for their actions during World War II. Reports of the banks’ financial dealings with Nazi Germany were published, and Jewish groups pushed for reclamation of money that had been placed into Swiss bank accounts before World War II by victims of the Holocaust. The Swiss banks were initially reluctant to cooperate with these efforts–in part because of their traditional secrecy–but the resulting worldwide outcry forced the banks to publish lists of people who owned dormant accounts that had been opened before 1945, accounts that contained a total of SFr 61.2 million ($41.3 million) in them. Although UBS actually had far fewer dormant accounts than the other two members of the Swiss Big Three, the bank’s handling of the affair was a public relations disaster. In one of the two most infamous incidents, Studer declared on television that the Jewish money lost in the Swiss accounts amounted to “peanuts.” In the other, a security guard at the bank uncovered wartime records that were headed for the shredder, was subsequently fired, and was accused by Studer of violating secrecy laws. One consequence was that certain customers in the United States, including New York City, began boycotting UBS. In early 1997, the Big Three banks agreed to set up a SFr 100 million ($70 million) humanitarian fund for the victims of the Holocaust. (here)

Part III coming up soon.


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