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ECONOMY

US sues UBS, alleging fraud in financial crisis

US authorities on Thursday sued Swiss banking giant UBS, accusing the European lender of fraud in the sale of mortgage-backed securities prior to the global financial crisis.

Published: 9 November 2018 08:36 CET

Between 2006 and 2007, the bank allegedly misled investors about the quality of billions of dollars in low-quality mortgages that were the basis of 40 derivatives deals, the Justice Department said in a statement from Washington.

The bank had said earlier Thursday that it had been advised the suit was coming and was prepared to defend itself.

“Investors who bought RMBS from UBS suffered catastrophic losses, which not only caused direct harm to those investors but also contributed to the financial crisis of 2008,” Richard Donoghue, US Attorney for the Eastern District of New York, said in the statement.

The bank insisted Thursday that the allegations were “not supported by the facts or the law”, and said it would contest any complaint “vigorously”.

“UBS is confident in its legal position and has been fully prepared for some time to defend itself in court,” it said.

Read also: French prosecutor calls for UBS to be fined €3.7 billion in tax fraud case

Subprime mortgages, credit granted to borrowers often with poor credit histories or insufficient income, were packaged into financial products and sold to investors.

But as borrowers defaulted on many of those mortgages, investors had no way to tell what portion of the loans in the derivatives were bad. Those products were at the heart of the 2008 financial crisis, which sparked a global recession and brought the international financial system to the brink of collapse.

US authorities have collected hundreds of billions in penalties from major financial institutions over their roles in the crisis but have faced stinging criticism for the lack of prosecution of prominent individuals.

Fellow Swiss lender Credit Suisse last year settled with US authorities for $5.3 billion.

UBS insisted Thursday that it was not a major player in US residential mortgages at the time the housing market crumbled.

Read more: UBS eyes new legal battle in US over subprime crisis

“This fact alone negates any inference that UBS engaged in an intentional fraud,” it said.

Earlier this year, UBS was among several large banks to settle a case over sales of subprime mortgages with the New York Attorney General, with the Swiss bank agreeing to dish out $230 million in that case.

Meanwhile in Paris on Thursday, a French prosecutor called for the Swiss bank to be fined 3.7 billion euros ($4.2 billion), alleging it knowingly helped French customers commit tax fraud.

UBS has also denied those allegations.

Read also: Swiss banker given ten years over Venezuela money laundering 

 

ECONOMY

Covid restrictions see Swiss working hours fall even further

Switzerland regularly ranks among the wealthiest countries, per capita, in the world. As wages continue on a long term upwards trajectory, the average number of working hours are falling.

Published: 20 November 2021 16:10 CET
An alarm clock ticks. The Swiss are working significantly less now than in 2010.
The Swiss are working significantly less now than in 2010. (Photo by Sonja Langford on Unsplash)

According to figures released by the Federal Statistics Office (OFS) this month, the Swiss are working significantly less now than in 2010. 

To mitigate for the effect of Covid-19, the study analysed two key periods: 2010-2019 (pre-pandemic) and 2010-2020 (which includes the impact of the pandemic). 

It found that Swiss residents were working 3.9 percent fewer hours less in 2019 compared to 2010. Factoring the impact of Covid-19 restrictions, the figures showed that there was a 7.2 percent decrease in working hours (approximately 14 days) in 2020 compared to 2010. 

READ ALSO: Salaries in Switzerland: In which sectors have wages increased the most?

In a report published by the statisticians, the reduction in working hours is due to a variety of factors, including the rise of part-time work, an increase in holidays taken, and a decline in overtime. 

Strikingly, the figures showed that the pre-pandemic decline in working hours was significantly larger for men (5.2 percent) than for women (1.1 percent). 

Covid-19 restrictions led to a further decrease in working hours on certain kinds of economic activity and consequent unemployment.

Hospitality and restaurant sectors were worst affected, with workers seeing an average reduction in working hours of 22.2 percent from 2019-2020. 

The OECD’s latest forecast summary for Switzerland, conducted in May 2021, projected relatively low GDP growth (3.2 percent in 2021 and 2.9 percent in 2022) compared to some of the country’s neighbours, including France. This growth, according to the organisation, can only be achieved with the easing of Covid-19 containment measures. 

How does Switzerland compare to other European countries?

Pre-pandemic, Switzerland had one of Europe’s steepest decline in working hours since 2010, behind Slovakia, Croatia, Malta, Slovenia and Estonia. But the country did far surpass the EU average decline (2.4 percent) during the 2010-19 period. 

READ ALSO Working remotely from Switzerland: What are the rules for foreigners?

Perhaps due to flexible remote working arrangements and other measures, the decline of working hours from 2019-20, as the pandemic took hold in Switzerland, was not as high in Switzerland as in many other European countries.

During this period, several European countries saw a steeper decline in working hours than in Switzerland (3.4 percent), including Italy (9.1 percent), Austria (7.2 percent), France (7.2 percent), Spain (6.5 percent) and Germany (3.7 percent), as well as 11 other nations.

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