It also supported the government's efforts to buy back the country's major railroads from foreign investors during the early s. This activity came to an abrupt halt in with the advent of World War I as the bank supported neutral Switzerland's wartime economy and aided the country's war effort.
Unlike other banks, which incurred major losses abroad during this period, Swiss Bank Corporation survived the war's financial pressures in spite of restricted access to its assets held outside the country.
One noticeable effect of the war on the bank, however, was the collapse of several industrial firms in which the bank had held a major interest. Beginning in , the bank took an active role in rebuilding the international economic system by extending loans to other countries. It also served as a depository of foreign funds for investors threatened by inflation and political instability in their own countries. In the bank assisted in locating the newly formed Bank for International Settlements in Basel.
This body was formed to mediate the payment of war-related reparations. As the country struggled to overcome the Depression in the aftermath of the stock market crash in New York and the devaluation of the Swiss franc in , the bank was forced to draw upon its already strained resources to help other institutions stay afloat.
When it became apparent that the world was about to fall victim to another major war, the bank received a large influx of foreign funds for safekeeping and also rallied its own resources in preparation for the conflict by opening an agency in New York in to store assets in case of an invasion.
As traditional business fell off once the war began, the Swiss government became the bank's largest customer as funds were directed toward the country's defense.
This war had a predictable effect on dividend payments and earnings, but Swiss Bank endured as best it could. Rudolf Speich became chairman in , soon to face the problems and opportunities of the postwar period. Once postwar finances had been sorted out, the bank turned its attention to financing private rather than state industry and to rebuilding the shattered economies of Europe. By Swiss Bank was lending money abroad again, and between and it contributed some SFr 2.
Meantime, the bank in completed the acquisition of the Basler Handelsbank Commercial Bank of Basel , a major though financially troubled bank that had been founded in By the bank's assets had doubled, to SFr 4 billion, and under Samuel Schweizer, who became chairman in , they had doubled again by Fueling this growth was a growing number of branches, both domestic and international.
In addition to the London banking office, which had opened in , and the New York operation that began in , the bank opened offices all over the world. In it became one of the first European financial institutions in Tokyo. During the s, because of heavy competition within Switzerland, the bank focused on the business of multinational corporations based in the United States and Canada, expanding its offices to several other North American cities.
A notable exception to this global focus was Swiss Bank's participation in a major restructuring of the Swiss watchmaking industry, which was suffering from competition from technologically superior Japanese companies. Swiss Bank and some of its competitors extended new credit to the nation's watchmakers, enabling them to use quartz technology in watches rather than obsolete mechanical designs. That same year, the bank appointed a new chairman, Hans Strasser, to lead it into a new decade.
Strasser was the first high-ranking Swiss banking official to come from the working class; he had been an employee of the bank for more than 30 years. Strasser was instrumental in shifting some of the overall decision-making responsibility from the bank's central management to its head branches and their respective subsidiaries.
At the same time, management worked to establish a better balance between domestic and international banking activity, temporarily restraining the development of new business opportunities by the foreign offices, and, in particular, decreasing the number of less profitable interbank loans until business with private and commercial customers increased at home.
During the s, the bank also played a significant part in protecting Swiss interests in its existing international business affairs. In addition, as one of the world's largest private gold dealers, it joined with the country's two other leading banks, the Union Bank of Switzerland and the Credit Suisse, to form Premex A. Three years later, the three banks were allies once again in refusing to participate in Swiss franc note issues lead-managed by the Swiss subsidiaries of two Japanese banks, the Long-Term Credit Bank of Japan and Industrial Bank of Japan.
Basing their protest on claims of unequal treatment of foreign banks by the Japanese government, the Swiss banks argued that since they were not permitted to underwrite securities or join the bond underwriting syndicate in Japan, Japanese banks should face similar restrictions in Switzerland.
The bank claimed that providing this information would endanger the customers involved, but the court held that it was in the country's best interests for the bank to cooperate with the British government, although it required that the information supplied by the bank be used only in prosecuting the IRA. In , the growing problem of international debt facing the world's financial institutions reached a critical juncture.
In an attempt to keep Mexico from defaulting on its foreign loans, an international group of bank creditors attempted to negotiate a bridge loan to Mexico that would allow the country to fulfill its interest obligations on existing debt until a longer-term financing package was arranged. Alone in its resistance to this plan, Swiss Bank proposed instead that Mexico be permitted to miss upcoming interest payments, which would then be added on to the amount of the present loan.
Under pressure from the International Monetary Fund and the other banks involved, Swiss Bank eventually agreed to participate in the original lending plan. At the end of the bank's investment banking operation added a branch in The Netherlands to its existing network of offices in London, Tokyo, New York, Frankfurt, Melbourne, and Zurich, providing more direct Swiss access to Dutch equities and bonds in the guilder market.
This expansion was followed in by the acquisition of Savory Milln, a London-based securities broker, and Banque Stern, a French investment bank, as well as a controlling interest in the Paris brokerage house of Ducatel-Duval. These takeovers were in Swiss Bank Corporation's tradition of international expansion, necessary in a small country with a limited--and crowded--domestic banking market. Worldwide competition was inevitable and in the Swiss banking community as a whole attempted to make up ground lost to more aggressive American, Japanese, and British financial rivals.
No longer able to remain cautious and grow solely by offering foreign investors the stability of the Swiss economic system and the tax advantages of a Swiss account as it had in the first half of the century, Swiss Bank attempted to further strengthen its international portfolio and solidify its U. Although the bank did hold accounts for some of the people involved, it denied that it had acted in violation of Swiss banking laws.
The bank went on the offensive beginning in February when, as one of the underwriters of Swiss franc bonds issued by RJR Nabisco, Inc. According to the provisions of the original bond issue, the bondholders were entitled to the return of their investment in the event of a corporate reorganization. The lawsuits filed by the bank on behalf of its bondholders were settled over the next two months before the eventual sale of the company.
Swiss Bank began the s as the weakest of the "Big Three" Swiss banks. Its international operations were particularly weak and had been hit hard by a series of bad loans that had been made to global real estate developers and takeover firms. But under the leadership of Marcel Ospel, who was head of international operations at the beginning of the decade, and Georges Blum, who was named president of the bank in , Swiss Bank adopted a new international strategy.
The conservative, lending-oriented approach was to give way to a riskier but potentially more rewarding goal: rapidly develop a strong global trading and investment banking operation.
At the same time, the bank's traditional domestic retail, corporate, and private banking activities were to be maintained. Founded in , the highly successful O'Connor had had a strategic partnership with Swiss Bank since To shake up Swiss Bank's sleepy international operations, executives from the American firm were placed in top management posts at Swiss Bank.
Later in , Swiss Bank's international ambitions took a major step forward through the purchase of S. The merging of Warburg and Swiss Bank's existing investment banking operations created SBC Warburg, one of the top players in global investment banking. In mid Ospel was promoted to president of Swiss Bank, with Blum taking over the chairmanship. While building up its international operations, Swiss Bank was struggling to turn around its domestic business, which was beset by loan losses in real estate and other sectors as the Swiss economy had been mired in recession the entire decade.
To address the problems in its domestic loan portfolio, the bank took a special provision of SFr 2. Create a personalised content profile. Measure ad performance. Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors.
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The company was founded on June 29, and is headquartered in Basel, Switzerland. UBS, as it exists today, is the result of a complex history, as detailed below. UBS also comprises a number of well-known securities firms that have been acquired by the bank and its predecessors. UBS, through Swiss Bank Corporation , traces its history to when six private banking firms in Basel, Switzerland pooled their resources to form the Bankverein , a consortium that acted as an underwriting syndicate for its member banks.
In , the Bankverein coordinated with the German Frankfurter Bankverein to form the Basler Bankverein , a joint-stock company replacing the original Bankverein consortium. After the new bank started with an initial commitment of CHF30 million and CHF6 million of share capital, it soon experienced growing pains when heavy losses in Germany caused it to suspend its dividend until In , SBC adopted its three-keys logo, designed by Warja Honegger-Lavater , symbolizing confidence, security, and discretion, which remains an integral part in the current-day logo of UBS.
The office, located in the Equitable Building , was able to begin operations a few weeks after the outbreak of the war and was intended as a safe place to store assets in the case of an invasion. SBC, which had entered the s with 31 branch offices in Switzerland and three abroad, more than doubled its assets from the end of the war to CHF4 billion by the end of the s and doubled assets again in the mids, exceeding CHF10 billion by The bank opened a full branch office in Tokyo in The acquisition of S.
Warburg had established a reputation as a daring merchant bank that grew to be one of the most respected investment banks in London. However, a Warburg expansion into the U. Dillon, Read, and Co. The Bank in Winterthur, founded in with an initial share capital of CHF5 million, focused on providing financing for industry and other companies, and had profited considerably from its close railroad connections and large warehousing facilities during the American Civil War when cotton prices rose dramatically.
By , offices were established throughout Switzerland. Although the bank suffered in the aftermath of World War I and the Great Depression, it was able to make several smaller acquisitions; in it established Intrag AG, an asset management business responsible for investment trusts , i.
The activities of the Union Bank of Switzerland during World War II were not publicly known until decades after the war, when it was demonstrated that UBS likely took active roles in trading stolen gold, securities, and other assets during World War II.
UBS came under significant pressure, particularly from American politicians, to compensate Holocaust survivors who were making claims against the bank. In January , Christoph Meili , a night watchman at the Union Bank of Switzerland, found employees shredding archives compiled by a subsidiary that had extensive dealings with Nazi Germany.
The shredding was in direct violation of a then-recent Swiss law adopted in December protecting such material. Criminal proceedings then began against the archivist for possible violation of a recent Federal Document Destruction decree and against Meili for possible violation of bank secrecy , which is a criminal offence in Switzerland. Both proceedings were discontinued by the District Attorney in September Meili was suspended from his job at the security company that served UBS, following a criminal investigation.
Meili and his family left Switzerland for the United States where they were granted political asylum. UBS opened branches and acquired a series of banks in Switzerland in the following years, growing from 31 offices in to 81 offices by the early s. UBS continues to issue gold bars via Argor-Heraeus which is famous for the unique kinebar holographic technology it uses to provide enhanced protection against bank gold bar counterfeiting.
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