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Reuters - Three European banks on Sunday announced a total of about $3.8 billion in exposure to an investment fund run by Bernard Madoff, the U.S. investor accused of running a $50 billion "Ponzi" scheme.
The largest banks of both Spain and France, Santander and BNP Paribas, and Swiss private bank Reichmuth & Co became the latest parties to detail possible losses over investments made with Madoff, who was arrested in New York on Thursday in the alleged fraud.
Santander put its client exposure at over 2.33 billion euros ($3.09 billion). BNP Paribas said it could face a potential loss of 350 million euro from exposure to Madoff-linked investments. And Swiss private bank Reichmuth & Co said it had about 385 million Swiss francs at stake, around $325 million.
Times of India - Can the wealthy trust their wealth managers any more after losing 30 to 60% of their wealth during the current global financial crisis?
The world’s top banks including brands like Morgan Stanley, UBS, Barclays and Standard Chartered operating in Asia are desperately struggling to find a suitable answer to this question.
It is interesting to see the usually suave and self-confident community of private bankers looking dazed and fearful of survival. There is already a run on deposits with some of Asia’s wealthy pulling out money from accounts of private banks. The future looks dismal. Some of the world’s top banks have either gone bust or merged with others to stave off closure.
"Professional advisers have failed to prove their worth," Peter Flavel, senior managing director of The Standard Chartered Private Bank told a conference of wealth managers in Singapore on Friday. "The players have changed in a way that was unimaginable a few months back. They will continue to change," he said.
Reuters - U.S. hedge fund Fairfield Greenwich Group has merged with Swiss private bank Banque Benedict Hentsch, bringing their combined assets under management to more than $18 billion.
The deal will allow Fairfield’s clients to access Banque Benedict Hentsch’s (BBH) suite of wealth management services and provide it a broader base of operations within Switzerland, according to a letter by Fairfield founding partner Andres Piedrahita to investors.
BBH gains added products and infrastructure support from the deal and the combined company will try to grow the private bank, the companies said in a statement.
The terms of the deal were not disclosed.
Geneva-based BBH, which was founded in 2004, serves institutional and private clients in areas such as banking, securities, foreign exchange, tax and estate planning, they said.