Posted on 02/26/2022 6:14:30 PM PST by dennisw
UBS Group AG triggered margin calls on some wealth management clients that use Russian bonds as collateral for their portfolios after marking down the value of debt issued by the country and its corporations.
The Swiss wealth manager is calling on some investors to add either cash or securities to their portfolio after cutting the lending value of some Russian bonds to zero, people with knowledge of the matter said. While the sovereign bonds still trade around 50 cents on dollar, and many Russian corporate bonds are well above that, UBS’s move signals it essentially will no longer accept them as collateral.
The bank may liquidate the securities at market value for those clients that can’t meet the additional requirements, the people said, asking not to be identified as the matter is private.
UBS, which says it caters to half the world’s billionaires, had $447 million of banking products including loans and guarantees to Russia in 2020. Wealth co-heads Iqbal Khan and Tom Naratil two years ago set a goal of doubling assets under management for the Central and Eastern Europe wealth business, which includes Russia.
(Excerpt) Read more at finance.yahoo.com ...
Margin calls for some companies could drive their assets to below a critical level - also causing a run on various funds for cash conversion.
This could hurt Europe and the US a lot more than it does Russia...
Russkie oligarchs cannot meet UBS margin calls and go bankrupt or lose billions. They say Putin is worth 200 billion from skimming oil and gas profits. I hope he has some of this in UBS and other Swiss banks.
If you haven't seen this movie, I highly recommend it.
One of the economic crash "trilogy" movies.
Jeremy Irons was so great in it.
These oligarchs are in managed funds, with a firm specializing in high net-worth clients.
This doesn't just affect the oligarchs, this affects the hedge fund or other entity managing those assets.
Anyone who has this paper in a margin account at UBS would be affected; the investor doesn't have to be a Russian.
That he was...
Things can go really bad when trading happens outside the hysteresis of a trading algorithm.
Bingo...
And if the other big brokerage houses follow suit...
Oligarchs are in Alsace, FR, Aspen, CO, and Ambramov is in the air just west of Vegas.
https://www.radarspots.com/oligarchs-flee-russia/
https://globe.adsbexchange.com/?icao=3c70b8
We’re getting a first hand look see how much control these people have over the financial markets....banks...etc. We could always be next.
Great movie!
Make popcorn. Alot of it.
https://www.nytimes.com/2017/11/05/world/yuri-milner-facebook-twitter-russia.html
Yep. When incompetent leftist bureaucrats attempt to act tough with something they know absolutely nothing about - economic sanctions and their effect on debt-based worldwide currency.
Recession anyone?
I've been saying it for a long time. I don't think the Fed will raise at their next FOMC meeting.
Trading with margin is voluntary ...
What are the other two movies in the trilogy?
Made me think of Long Term Capital Management collapse in 1998. Seemingly minor events in far off lands can trigger all kinds of major problems. There was a book I read years ago about it and how the Federal Reserve reacted, IIRC?
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