It’s a good time for investors, says Michael Appenzeller of Nectar Digital Wealth It’s a good time for investors, says Michael Appenzeller of Nectar Digital Wealth It’s a good time for investors, says Michael Appenzeller of Nectar Digital Wealth
Markets sent out mixed signals the last few weeks and left investors uncertain of their future strategy. Michael Appenzeller, CEO of Nectar Digital Wealth, looks at the current risks and discusses how algorithms can help investors make better decisions.
Cindy Roberts
SNB begins paying banks to lend to cash-starved economy
The Swiss National Bank and financial supervisor FINMA joined forces today to pump unlimited liquidity into the Swiss banking system and free up credit for the coronavirus-crippled economy. The SNB has set up a refinancing facility to give banks access to liquidity needed to expand lending rapidly and on a large scale, President Thomas Jordan said. He said there is no upper limit on the amounts available and drawdowns can be made at any time. The interest rate will be minus 0.75, same as the SNB policy rate. “The coronavirus pandemic is having a serious impact on the Swiss economy,” the SNB said. “To combat this crisis, it is essential that companies have access to credit and the banking system has access to liquidity.” The facility will allow banks to obtain liquid assets from the SNB to provide federally guaranteed loans to cash-strapped companies. The government is providing CHF 20 billion for such loans as part of a larger rescue plan for the economy. Economists agree that Switzerland is headed for a recession this year, but they differ on how deep the downturn will be. UBS expects gross domestic product to shrink 3 percent for the whole year, the bank said today. The government has been overwhelmed with requests from companies to cover the wages of workers idled by coronavirus containment efforts. As of Wednesday, the claims represented about 480,000 employees or about 9.5 percent of all Swiss workers. Capital buffer deactivated The SNB is also asking the government to deactivate a capital buffer that protects banks against losses on mortgages. FINMA agreed with the move, saying Swiss financial firms are well capitalized and prepared to deal with the current market turbulence and extreme stress scenarios. The lack of a cash cushion in the 2008 crisis led to the bailout of many banks, including UBS. In the years since, regulators have required lenders to improve their ability to absorb market and economic shocks. These buffers can now be used to offset the turbulence caused by the coronavirus pandemic, the supervisor said. FINMA is changing the way banks calculate their leverage ratio, saying they no longer need to hold capital against central bank reserves. That frees up around CHF 20 billion in core capital to support lending to the broader economy, FINMA said. The leverage ratio shows how much capital is in the form of debt and reflects a bank’s ability to meet its financial obligations. Buybacks suspended FINMA said it welcomed the decision of financial companies to suspend share buyback programs, which could leave them with reduced ability to deal with financial stress. Earlier Wednesday, Credit Suisse froze its plan to buy back as much as CHF 1.5 billion of shares this year due to economic uncertainty caused by the coronavirus. The supervisor urged banks to “consider carefully the level of upcoming dividend distributions.” “Strong institutions who act voluntarily now to restrict distributions will remain strong for longer, in the interests of all their clients,” the supervisor said. “Acting to preserve strength is not a sign of weakness.” The government provided more details on its rescue plan today. Business can apply for credit up to 10 percent of their income but no more than CHF 20 million. There will be no interest on loans up to CHF 500,000. Higher amounts will be charged 0.5 percent in interest. “The banks aren’t going to do good business with that,” said Finance Minister Ueli Mauer.
CNNMoney Switzerland
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Ana Maria Montero
Bear market won’t last long, says Credit Suisse
Once coronavirus infections begin to decline in Europe and the United States, markets will start to rally powerfully, says Burkhard Varnholt, Credit Suisse’s chief investment officer for Switzerland. “If you’re buying stocks today—diversified— probably six months from today, you’ll have a double-digit gain on that.”
Hannah Wise
Why the oil price war may balance market
Saudi Arabia can only balance the market by going in aggressively, says economist and energy expert Cornelia Meyer. She says that the price war, which has caused “carnage” on equity markets, could bring Russia back to the negotiating table.
CNNMoney Switzerland
Markets tumble on oil shock
Oil prices suffered a historic collapse after Saudi Arabia shocked the market by launching a price war against onetime ally Russia. The turmoil comes after the two sides failed to agree on measures to cut production. CNN correspondent John Defterios explains.
Cindy Roberts
Financial firms empty out as coronavirus cases mount
The Swiss stock exchange operator today joined a growing number of financial institutions segregating employees as the industry braces for disruption from the rapidly spreading coronavirus. UBS and Credit Suisse took similar action. Starting Monday, all SIX teams operating critical platforms, applications and services will be split into at least two locations, a person with knowledge of the matter said. For example, half will continue to come to the office while the other 50 percent will work either from home, in a different building, or even a different city. The split teams have been told not to meet under any circumstances, including privately, the person said. That includes not visiting company-linked fitness centers or other shared facilities abroad. Banks in Europe and on Wall Street are activating crisis plans as the virus spreads to more financial centers. For many lenders, it’s their first widescale experience with working from home and serves as an important test of the future of remote work. UBS, Credit Suisse also splitting up teams Julian Chan, a spokesman for the operator, confirmed that SIX has put in place emergency procedures requiring at least some staff in all critical departments to work from home. He declined to say how many employees are affected by the new arrangements. SIX, the backbone of the Swiss financial center, employs some 2,600 people across 20 countries. Most are in the four Swiss cities of Zurich, Olten, Biel and Geneva. The operator is owned by about 125 domestic and foreign banks. Among them, UBS and Credit Suisse also said they are separating teams in different locations. UBS is introducing the system, which is already in place in Asia, in Switzerland and the U.K. “We are prepared to implement split operations in other locations across the globe if appropriate,” said spokesman Igor Moser. Generali’s Swiss subsidiary today ordered employees to work from home until at least March 31. The insurer also barred meetings and other events with more than 10 people. The European Central Bank, meanwhile, has asked eurozone lenders to review their plans and the actions they can take to stem the spread of the virus. Switzerland’s financial supervisor FINMA said it is in contact with banks “as is customary in such situations” and described the system as “well prepared.” Although most coronavirus cases have been recorded in China, the virus is spreading worldwide with some 80 countries reporting confirmed cases of the flu-like illness that can lead to pneumonia. Switzerland, which has more than 200 confirmed cases, reported its first death on Thursday, a 74-year-old woman in the canton of Vaud in western Switzerland.
Hannah Wise
SNB in a tight spot after Fed’s coronavirus cut
The Swiss National Bank will probably participate in any concerted action by central banks to shore up the global economy in response to the coronavirus epidemic, the former deputy governor of Ireland’s central bank said Tuesday. “My suspicion is, if there is coordinated action, the SNB will play along even though they may prefer not to do anything right now,” Stefan Gerlach, chief economist of EFG Bank, told CNNMoney Switzerland. “It is really key for such an open economy as the Swiss economy to be fully engaged in international monetary policy developments,” he said. The U.S. Federal Reserve cut rates by half a percentage point Tuesday, saying the coronavirus “poses evolving risks to economic activity.” Markets expect other central banks to follow suit. On Monday, the Organization for Economic Cooperation and Development said that the virus would take a heavy toll on global growth if it spreads widely outside of China. Earlier on Tuesday, finance ministers and central bankers from the G-7 countries said they were ready to use “all appropriate policy tools”—including possible fiscal stimulus measures—to cushion the impact. The coronavirus comes at a tough time for the SNB. In January, the U.S. put Switzerland on its list of countries suspected of manipulating exchange rates to gain a trade advantage. The franc strengthened to multiyear highs as traders bet that the move would make it harder for the SNB to intervene in markets. Then last week, the currency climbed to its highest since July 2015 as investors dumped stocks and sought shelter in haven assets. It was trading around 1.07 to the euro late Tuesday. The SNB has already gone to extraordinary lengths to discourage investors from buying the franc, which undermines Swiss exporters. Switzerland has the world’s lowest rates at minus 0.75 percent, introduced after it abandoned its cap in 2015. Whether the SNB goes deeper into negative territory may depend on the European Central Bank. Gerlach, who served as deputy governor of the Central Bank of Ireland between 2011 and 2015, said that while the Fed move puts pressure on the ECB to also act, it is unlikely to do so quickly. ECB President Christine Lagarde needs to persuade the Governing Council that joint action is necessary now, he said. “I suspect that there are several members of the Governing Council who don’t think that this is something that needs to get done right now,” he said.
Hannah Wise
Ditching gold in times of trouble
We won’t know for a couple more months just what the coronavirus means for our economy. But for now Thomas Wille, head of research and strategy at private bank LGT, isn’t waiting to find out. “We just took some chips off the table, not in equities, but in gold,” he says.
Hannah Wise
Hamers faces a tough to-do list at UBS
ING’s Ralph Hamers has his work cut out for him when he takes over from Sergio Ermotti as CEO of UBS later this year, according to financial journalist Haig Simonian and Adriano Lucatelli of Descartes Finance. They say the Dutch banker will have to speed up the bank’s digital transformation, cut costs, and deal with the potential fallout from the ongoing legal case in France.
Olivia Chang
Ralph who? How Hamers made the cut at UBS
In his six years as CEO of ING, Ralph Hamers has transformed the Dutch lender into a leading digital bank for mom-and-pop consumers. Now UBS is tapping his expertise on behalf of the world’s wealthiest private investors.
Hannah Wise
Europe’s new tech policy: what you need to know
CNN’s Anna Stewart waded through the proposals out today so you don’t have to. Here’s the bottom line when it comes to data and AI in Europe.
Hannah Wise
Why Europe may not need Big Tech
Europe doesn’t necessarily need companies like Amazon, Google, and Facebook to be competitive in the digital economy, says Joanna Bryson, professor of ethics and technology at Hertie School in Berlin. “People worry that we’re losing competition because we don’t have these giant companies that we can’t control,” she says. “That’s not evidence that we’re doing a bad job.”
Hannah Wise
Pros and cons of taxing carbon
Taxing carbon emissions is just one piece of a broader puzzle in the effort to fight climate change, says Tony Patt, professor of climate policy at ETH Zurich. He says political risks and competition from renewable energy often limit the effectiveness of carbon taxes.
CNNMoney Switzerland
Zuckerberg does facetime in Brussels
Mark Zuckerberg held talks with top EU officials as the bloc drafts a new digital policy that is expected to strengthen government scrutiny of how companies like Facebook use artificial intelligence. Going into today’s meeting, he made clear there was room for more rules on data use, privacy, and content. CNN Europe Editor Nina dos Santos reports from Brussels.

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