UBS is bigger but Credit Suisse wields considerable influence, with $1.4 trillion assets under management. “Markets are very nervous, and I think an additional accident in Switzerland would have fueled a lot of problems,” he said.Ĭredit Suisse is among 30 financial institutions known as globally systemically important banks, and authorities were worried about the fallout if it were to fail. bank collapses and the danger to Credit Suisse was “an international banking crisis in the making.” Tobias Straumann, an economic history professor at University of Zurich, said the merger was the right move because the U.S. But concerns about risks to the deal, losses for some investors and Credit Suisse’s falling market value could renew fears about the health of banks. failures have raised questions about other potentially weak global financial institutions, sweeping up the already beleaguered Swiss bank.Ĭredit Suisse has faced an array of troubles in recent years, including bad bets on hedge funds, repeated shakeups of its top management and a spying scandal involving UBS.Īnalysts and financial leaders say safeguards are stronger since the 2008 global financial crisis and that banks worldwide have plenty of available cash and support from central banks. All Rights Reserved.Many of Credit Suisse’s problems were unique and unlike the weaknesses that brought down Silicon Valley Bank and Signature Bank in the U.S., including high interest rates. UBS said it sold the clearing unit in order to concentrate on its core business of managing money for the rich.Ĭopyright 2003 Thomson Media Inc. Profits tumbled 39% last year, and as losses continue to mount, the firm has been increasingly looking to expand in the high-net-worth asset area. weighs in with 400 clients.įidelity currently manages $755 billion in assets, down from its peak of $1 trillion, and has seen its profits struggle amid a tough economic climate. ![]() comes in second with around 500 clients, while Bear Stearns Securities, a unit of Bear Stearns Cos. Leading the field is the Bank of New York, which has about 1,400 clients. TowerGroup said there are an estimated 100 players in the clearing business, but that a large number of them may not be able to survive on their own. Pershing has more than 850 clients itself. Fidelity has typically stayed away from acquisitions, instead relying on building its own business.īut, in early in 2003, CSFB agreed to sell its Pershing unit to The Bank of New York in a deal that combined $2 billion in cash, the repayment of a $480 million subordinated loan and a contingent payment of up to $50 million hinging on future performance. Last year, Fidelity turned some heads as word spread that it had interest in purchasing Zurich, Switzerland-based Credit Suisse Group's Pershing unit. However, this purchase may not have been the prize the company had been eyeing. The firms expect the purchase to close during the second quarter. CSC will initially stay a separate subsidiary from Fidelity's National Financial unit. Fidelity said the deal will bring 150 clients to its existing business, which is said to be at about 150 to 170 clients.Īt the end of February, National Financial, Fidelity's existing source of clearing business, was the custodian for approximately $231.1 billion in correspondent broker/dealer assets. ![]() The deal will allow Fidelity to beef up in the clearing field, more than doubling its number of clients, bringing it to a total of about 300 and putting Fidelity in the top eight clearing firms, according to TowerGroup.
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