A group presentation based on the Swiss banking system, comparison to the EU bailouts / Quantitative Easing and a company profile of UBS.

1. International financial markets
Group Switzerland
Eric Iriajen
Leopold Hensel
Shin Yuan Huang
Vanish Patel
Sana Usmani
University of Westminster, London, November 7, 2011

2. Agenda
Switzerland in the financial Crisis
1 Switzerland’s Economic Structure
2 Business Freedom
3 Financial Institutions
4 Government Intervention
5 The UBS Case
6 The Euro Crisis and the Speculation against the Swiss Franc
7 Economic Future of Switzerland
8 References
2 - Global Financial Markets Presentation - Switzerland November 7th, 2011

3. Switzerland’s Economic Structure
Key Numbers
Gross Domestic  535.65 billion CHF (2009)
Product (Real)  68’662 CHF GDP p.c. (2009) – CHF/Pound: 1,4/1
 Primary: 3.7%
Employment  Secondary: 22.85%
Structure  Tertiary: 73.5 %
 Most important: pharmaceuticals, food, watches, tourism, mechanical
engineering and financial services
Export
 147.4 billion Euro in 2010 (52.5% of GDP)
 14.6 billion EURO
Trade Surplus
 Average unemployment rate 2009: 2.8%
Employment
 4.547 million people labour force
Sources: www.bfs.admin.ch, epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/
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4. GDP composition
Source: CIA World Bank
4 - Alphas takeover of Baldor November 7th, 2011

5. Global financial impact on Switzerland
Index of Economic Freedom
General description
 What is Economic Freedom?
 Switzerland is 5th in the 2011 world ranking, 1st out of
43 countries in the European region
 Comparison Switzerland, United Kingdom and United
States.
5 - Alphas takeover of Baldor April 2011

6. Economic Situation
Graph Compare
6 - Global Financial Markets Presentation - Switzerland November 7th, 2011

7. The Financial Sector(1/2)
Is important locally…
Some numbers …and the structure
 6% of the workforce is  Mainly insurances, banks and –
responsible for 12% of the Swiss newly - hedge funds
GDP
 Bank System: Universal banks
 Responsible for a net surplus of (UBS and CS), cantonal banks,
12 billion CHF on the balance and foreign controlled banks 
of payment 327 institutions
 Swiss Banks have 11.5 trillion  Customer confidentiality and
francs AuM political stability
 Swiss banks hold over 2,000%
asset value of GDP
Source: http://www.swissworld.org/
7 - Global Financial Markets Presentation - Switzerland November 7th, 2011

8. The Financial Sector(2/2)
…as well as globally
General description
 The BIS and the WEF are headquartered in Switzerland
 Known as a global tax evasion hub  serious conflicts with OECD countries
 BCBS  Basel III
Shares of AuM in international private banking, 2009
Switzerland 27%
United Kingdom 25%
Luxemburg 11%
Caribbean 12%
Singapore and Hong Kong 10%
United States 8%
Other 7%
8 - Global Financial Markets Presentation - Switzerland November 7th, 2011

9. Government Intervention (1/2)
General description and Switzerland
General description Switzerland
 Quantitative Easing is a  Secured savings up to
form of government 100’000 CHF pp
intervention  Saving of the UBS by the
 Method of monetary policy State and the national
 Rarely occurs Bank
 Global financial crisis  Barely deficit spending in
effect opposite to other
countries
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10. Government Intervention (2/2)
Swiss stimulus compared to other countries
Sources: Non banking: Economic World (until Dec 2010) Banking: Bloomberg (until Sept 2011)
10 - Global Financial Markets Presentation - Switzerland November 7th, 2011

11. The UBS case (1/3)
UBS in 2007 and how the drama started
Situation 2007 Risk factors
 Largest asset manager in the  High exposure in American
world 3.3 trillion AuM junk bonds
 Change from pure wealth  Threatened by upcoming tax
management to investment problems with USA and EU
banking  Big share of swiss economy
 Biggest bank in Switzerland
and significant impact on
economy and culture
Solution: Saved by external investors and the state of Switzerland
11 - Global Financial Markets Presentation - Switzerland November 7th, 2011

12. The UBS case (2/3)
The Stock of UBS since 2007
4th quarter 08, UBS
1. April UBS announces net loss of
announce loss of 8 billion and outflow
12 billion for first of 80 billion in assets
quarter
16. Oct. the
government Kweku Adoboli
announces to looses 2,8 billion
save UBS frncs
10. Dec 2007
UBS announces
Capital raise
Source: www.comdirect.de
12 - Global Financial Markets Presentation - Switzerland November 7th, 2011

13. The UBS case (2/3)
The Stock of UBS since 2007
Credit suisse stock UBS stock
Source: www.comdirect.de
13 - Global Financial Markets Presentation - Switzerland November 7th, 2011

14. The UBS case (3/3)
The Stock of UBS since 2007
SNB Loan max. 54
Ownership
bad bank - billion
1 CHF
Buy back
option
Max 6 billion equity
Cash
UBS Bad Bank
Illiquid assets
Mandatory
Cash convertible bonds
6 billion
Government
14 - Global Financial Markets Presentation - Switzerland November 7th, 2011

15. The Swiss Franc Spekulation
The Euro/CHF Excange Rate since 2007
6. Sept 2011
SNB sets a low
boarder of 1,20
Oct. 2007
peak at 1,68
Since 2010
Sept. 2008 With the bad financial
Lehman Crash situation of Greece as the
Euro debt crisis starts
Source: www.comdirect.de Aug. 2011
US loose
AAA Rating
15 - Global Financial Markets Presentation - Switzerland November 7th, 2011

16. Economic future of Switzerland
Assumptions
 Oijop
 Still one of the wealthiest nations in the
world, with a high chance of keeping that
place
 A risk factor although is, that its economy
depends heavily on the world economy
 Importance of offshore banking is unclear.
 The exchange rate plays a big role, since
over a half of its exports go into the EU. 
SNB Intervention bears risk of inflation.
November 7th, 2011
16 - Global Financial Markets Presentation - Switzerland

17. References
• CIA worldfact book, (2011). Switzerland. [Online] Available from
https://www.cia.gov/library/publications/the-world-factbook/geos/sz.html [Accessed
31/10/2011]
• BBC, (2011). Financial Glossary. [Online] BBC. Available from
<http://www.bbc.co.uk/news/business-15060416> [Accessed 03/11/2011]
• Schweizer Bundesamt fuer Statistik . [Online] Available from http://www.bfs.ch
• Trading Economics, (2011). Switzerland Interest Rate. [Online] Trading Economics. Available
from <http://www.tradingeconomics.com/switzerland/interest-rate> [Accessed 04/11/2011]
• Economic Watch, (2010). Spain Stimulus package. [online] Economic watch. Available from
http://www.economywatch.com/economic-stimulus-package/spain.html [accessed 06/11/2011]
• Index of Economic Freedom, (2011). Switzerland. [Online] Available from
http://www.heritage.org/Index/Country/Switzerland [Accessed 25/10/2011]
• Swiss World, (2011). Switzerland Economy. [Online] Available from
http://www.swissworld.org/en/economy/?gclid=CNSa8rPKkawCFQ8ntAodbS4KnQ [accessed
28/10/2011
• Trading Economics, (2011). Switzerlnad GDP Growth chart. [Online] Available from
http://www.tradingeconomics.com/switzerland/gdp-growth [Accessed 28/10/2011]
• Bank of International Settlements, (2011). Basel III. [Online] Available from
http://www.bis.org/bcbs/basel3.htm [Accessed 01/11/2011]
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18. Thank you for your attention!
Time for discussion and questions
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