Today’s need-to-know storiesSwitzerland advances proposed $20bn UBS capital increase
The Swiss government is standing firm on proposals for UBS to increase its capital by around $20bn to mitigate risks posed by its increased scale after acquiring Credit Suisse.
Following consultations, the Federal Council confirmed on Wednesday that UBS must fully capitalise its foreign subsidiaries with high-quality capital held in Switzerland, describing the revised proposals as “more moderate than planned” and a “balanced overall package”.
Despite receiving some concessions, including relaxing rules on some balance sheet items such as deferred tax assets and software, UBS criticised the measures as “extreme” and lacking “international alignment” that “disregards concerns expressed by the majority of respondents”. The bank estimates the real impact on its capital at $22bn.
The Swiss Bankers Association branded the proposals “extremely problematic”, accusing officials of “ignoring the predominantly critical feedback from the consultation process”.
Swiss finance minister Karin Keller-Sutter, who led on the reform package, said the government had eased its initial proposals and made significant concessions to UBS. “It’s absolutely manageable for UBS,” she said.
The government’s proposal on foreign capital rules will now face a lengthy parliamentary debate starting in June, which could lead to further revisions.
Goldman agrees settlement in lawsuit tied to 1MDB scandal
Goldman Sachs has agreed to settle a shareholder lawsuit that accused the bank of misleading investors about its role in dealings linked to 1MDB, the Malaysian sovereign wealth fund that has been at the centre of a global corruption scandal.
A Manhattan federal court filing on Wednesday said the parties expect to seek preliminary approval for the proposed settlement by May 20. The financial terms of the settlement were not disclosed.
Investors alleged that Goldman overstated the strength of its risk controls while understating its exposure to transactions tied to 1MDB. The bank helped raise $6.5bn for the fund through bond sales and earned around $600mn in fees.
US and Malaysian authorities have said around $4.5bn was misappropriated from 1MDB through offshore accounts and entities linked to former Malaysian businessman and fugitive Jho Low, who has been wanted by Interpol since 2016 for his role in the scandal.
Goldman agreed in 2020 to pay more than $2.9bn to resolve criminal and civil investigations by authorities in the US, UK and Singapore.
In May 2024, a federal judge in Brooklyn dismissed the criminal case against the bank after it completed a three-year deferred prosecution agreement.
Ex-RBS employee jailed for taking bribes
A former Royal Bank of Scotland relationship manager has been jailed for 21 months after admitting to soliciting more than £270,000 in bribes from business clients between 2012 and 2016.
Stuart Holloway, 49, who worked in the bank’s controversial Global Restructuring Group, pleaded guilty to two offences under the Bribery Act at Edinburgh Sheriff Court.
The case is understood to be the first criminal conviction linked to the long-running GRG scandal, which first came to light in 2018 after reporting by the Times newspaper prompted multiple investigations into the unit’s treatment of struggling companies.
The GRG unit was established to support distressed businesses but was later accused of deliberately pushing viable firms into difficulty to generate profit.
RBS rebranded to NatWest in 2020 following its £45bn taxpayer bailout during the financial crisis.
“This criminal activity is totally unacceptable and relates to the unauthorised, private behaviour of an individual, which fell entirely outside the bank’s policies and processes for the treatment of customers,” a Natwest spokesperson said.
FATF recommends reform programme for Italy
Italy should improve its response to money laundering and do more to prosecute terrorist financing, the Financial Action Task Force said on Thursday.
Following a visit between June and July last year, the Paris-based watchdog said Italy had improved enforcement but could still impose tougher sanctions and bring more criminal cases.
It has set out a three-year programme of recommended reforms, including clearer guidance on money laundering risks for businesses outside the traditional financial sector.
“The assessment found that sophisticated analysis of terrorist financing-related suspicious transaction reports by the Unità di Informazione Finanziaria and Guardia di Finanza resulted in a significant number of complex standalone terrorist financing investigations being pursued over the evaluation period,” the FATF said in its report.
“However, simple terrorist financing cases involving those who raise or use their own funds or move low levels of money to support terrorist activity are not actively pursued with a goal to prosecution.”