Per reporter: Li Menglin, Zheng Yuhang, Tan Yuhan Per editor: Tan Yuhan, Lu Xiangyong
Under pressure from the SNB, the Monetary Authority and the Ministry of Finance, Credit Suisse was forced to "sell" UBS at a price of CHF 3 billion. The hastily brokered merger offended Credit Suisse's majority Middle East shareholders and angered AT1 bond investors around the world.
Behind the Credit Suisse crisis, the banking sector, the backbone of the Swiss state, faces even greater challenges. The latest news shows that the US Department of Justice is investigating whether Credit Suisse and UBS helped Russian oligarchs evade sanctions. Is Switzerland still the safe haven of global wealth? "Daily Economic News" connected with Hu Jie, professor of the Advanced School of Finance of Shanghai Jiao Tong University, and other experts to interpret.
TikTok's mediation with the United States, which has lasted for more than two years, culminated this week. On March 23, 2023, local time in the United States, TikTok CEO Zhou Shouzi attended a hearing of the House Energy and Commerce Committee and accepted a five-hour series of questioning by US lawmakers. At present, Tik Tok is facing a critical moment when the United States is being forced to sell or banned, and "People of the Week" takes you into the CEO Zhou Shou who is "fighting for life and death".
Credit Suisse's "selling" aftermath: the United States intervened in the investigation
The privacy and neutrality of the banking industry is greatly reduced
Image source: Visual China VCG31N1239466771
Nearly a week has passed since the Swiss government's arranged "arranged marriage" for Credit Suisse and UBS, but the troubles in Swiss banking are far from over. The deal was hastily formed, with temporary legislation to eliminate shareholder voting rights and zero out $17.2 billion in AT1 bonds in defiance of industry practice, causing serious damage to the reputation of the Swiss banking sector.
Behind the Credit Suisse crisis, the banking sector, the backbone of the Swiss state, faces even greater challenges. The latest news shows that the US Department of Justice is investigating whether Credit Suisse and UBS helped Russian oligarchs evade sanctions. Under external pressure, the Swiss banking industry, which has prided itself on centuries of secrecy and neutrality, has been greatly compromised, and the Swiss banking industry is facing a moment of "rebirth".
The clearance of AT1 bonds has caused public outrage
These gold lords step on thunder
Under pressure from the SNB, the Monetary Authority and the Ministry of Finance, Credit Suisse was forced to "sell" UBS at a price of CHF 3 billion. The hastily brokered merger has offended Credit Suisse's majority shareholder in the Middle East and angered AT1 bond investors around the world, casting an indelible shadow over the reputation of Swiss banking.
As Swiss regulators rushed to make arrangements for Credit Suisse last week, Credit Suisse's majority shareholders in the Middle East found that not only had their proposed solutions been completely ignored, but the Swiss government had even passed emergency legislation that stripped shareholders of the two banks of their voting rights on the merger. UBS's final purchase price of CHF 0.76 per share cost Credit Suisse, the State Bank of Saudi Arabia, the largest shareholder with 9.9% of its shares, and the Qatar Investment Authority (6.8%), the second largest shareholder, lost more than US$1 billion.
According to Bloomberg, after the Credit Suisse incident, investment institutions such as sovereign wealth funds in the Middle East have been very cautious about investments involving foreign financial institutions.
However, compared with the holders of Credit Suisse's AT1 bonds, shareholders can still get some comfort, after all, their equity can still be worth some money; AT1 bonds, worth 16 billion Swiss francs (about $17.2 billion), were cleared overnight. Adding to investor anger is the Swiss government's approach in violation of common banking practice whereby bondholders' interests take precedence over common stockholders.
The so-called AT1 bond is an emergency convertible bond (CoCo bond), which is designed to convert into shares or write down when the bank is in crisis, so as to replenish the bank's capital and absorb losses, which is a high-risk, high-yield bond. Credit Suisse's AT1 bond contract does provide for a complete write-down in case of emergency.
"Switzerland's approach is reasonable from the literal meaning of the contract, but investors may not have taken this kind of contract seriously before, and no one thought that a 167-year-old bank would collapse," Hu Jie, a professor at the Advanced School of Finance at Shanghai Jiao Tong University, told the Daily Economic News. ”
Ma Tianping, a part-time researcher at Tsinghua University's Wudaokou School of Finance, believes that even if it is admitted that the Swiss government's approach is contractually fine, the complete write-down of AT1 bonds still subverts investors' expectations and exposes the inexperience of Swiss regulators. "The practice of buying [such bonds] by the central bank and then privatizing and selling them can be used, which can avoid a liquidity crisis and avoid panic." From this operation in Switzerland, we can see that their experience is certainly not as rich as the Fed in 2008," Ma Tianping told the Daily Economic News.
Angry Credit Suisse AT1 bond investors have begun seeking to recover losses through litigation. Quinn Emanuel Urquhart & Sullivan has reached out to damaged investors around the world. The law firm told the Daily Economic News via email that the conference call held on Wednesday (March 22) attracted more than 750 investors to explore various legal options for prosecution in Switzerland and the United States.
This week, the Bank of England and the European Central Bank issued statements clarifying the priority of AT1 bondholders over common shareholders, thereby distancing themselves from the Swiss regulator's approach and stabilizing their own bank bond markets. Richard East, a partner at Quinn Emanuel, told the Daily Economic News: "When other regulators politely point out that they respect the usual priorities in bank resolution, you know that there must be something wrong [with the Swiss approach]. He also argued that the treatment of Credit Suisse was essentially a regulatory-led bank resolution, "dressed up as a merger."
Zhang Chao, a researcher at Swire Pacific Thinktank, also believes that Switzerland's forced sale of Credit Suisse to UBS without a vote at the shareholders' meeting cannot trigger the terms of AT1 bonds, so this matter sets a "very bad precedent" and has dealt a huge blow to the confidence of the Swiss and even the entire European and American banking industry.
Banking privacy is greatly reduced
The foundation of the nation was shaken
The reason why the Swiss government has been so "heavy-handed" is because the Credit Suisse crisis is not just about a bank, but has shaken the foundation of Switzerland.
"Credit Suisse is not just a Swiss company, it is already part of the Swiss national identity," Thierry Burkart, leader of Switzerland's third-largest party, told foreign media. This will deal a lasting blow to Switzerland's reputation. ”
Swiss industrial tycoon Alfred Escher founded Credit Suisse 167 years ago to raise money to build railways that connect Switzerland surrounded by the Alps with the rest of Europe. Credit Suisse grew up with Switzerland's reputation as a neutral country and a safe haven of global wealth. Currently, the Swiss banking system is five times the size of Switzerland's GDP, and the balance sheets of Credit Suisse and UBS together are twice GDP.
Image source: Financial Stability Report 2022 published on Credit Suisse's official website
Credit Suisse's collapse after years of scandals and losses reflects the structural challenges facing Swiss banks, particularly the long-prided secrecy and neutrality, which are fading under external pressure.
According to Bloomberg on March 23, the US Department of Justice is investigating whether anyone in the financial community helped Russian oligarchs evade sanctions, and in addition to several large US banks, Credit Suisse and UBS have also received subpoenas. Banks that violate U.S. sanctions will face serious consequences, with BNP Paribas fined nearly $9 billion by the United States in 2014.
In fact, after the outbreak of the Russian-Ukrainian conflict in 2022, Switzerland abandoned its long-established neutral country policy, joined US and European sanctions, froze about $8.1 billion in Russian assets, and Swiss banks also interrupted business for individual Russian customers. Russia has therefore included Switzerland in the list of "unfriendly countries".
"Switzerland prides itself on being neutral, but last year's involvement in sanctions against Russia has had a huge impact on its so-called neutral nature. The handling of the Credit Suisse incident this time has learned the lessons of the Lehman crisis, hoping to deal with it quickly, although the starting point is good, but the approach has chosen the next policy, which can be said to be a kind of recklessness," Zhang Chao said, adding that it took more than a hundred years to establish the national credibility of the entire Switzerland, but it may be destroyed overnight, and it may be difficult to repair in the next one or two decades.
Hu Jie believes that the secrecy of Swiss banks has been greatly reduced long before the Russian-Ukrainian conflict, especially under the pressure of the legislative authorities led by the United States, which has completely surrendered more than a decade ago, as long as the United States puts forward some requirements that meet the standards, the Swiss side will basically cooperate. "I think the Swiss banking sector is now facing the problem of [the need] to be reborn, because it used to be differentiated by privacy, but now it is basically on par with other countries, so it has to look for competitive advantages in other ways," Hu said.
Who is Tiktok CEO of the "Tongue War" US Congressional Group?
At 10 a.m. local time on March 23, 2023, TikTok CEO Shou Zi Chew walked into the U.S. Capitol to attend a hearing of the US House Energy and Commerce Committee, and was questioned by U.S. lawmakers for five hours on TikTok's control, sensitive content censorship, platform algorithms, youth protection and many other aspects.
At this critical moment when TikTok is facing forced sale or banning in the United States, Zhou Shouzi went to Capitol Hill to testify at this time, which can be called a "life-and-death fight" for TikTok. At the time of the survival of the enterprise, the world's attention is focused on Zhou Shouzi.
Two days before the hearing, Zhou was already taking action to defend TikTok, posting a video through TikTok's official account inviting U.S. users to tell him what they wanted to say to members of the U.S. Congress.
The video received more than 500,000 likes, saying: "This is a pivotal moment for us. This could take TikTok away from your 150 million people. ”
Following Meta's Mark Zuckerberg and Google's Sundar Pichai, tech executives endure "tricky tricks" at congressional hearings about the potential harms of their products, in what appears to be a kind of Silicon Valley celebrity ritual.
However, Zhou Shou was not from Silicon Valley and did not often appear in the public eye before this. Little is known about the 40-year-old Singaporean's way of working or even how much power he actually wields in the company. Who is Zhou Shouzi?
Chow grew up in the "city-state" of Singapore, where he attended Hwa Chong Institution, Singapore's elite Chinese school, joined the army in 2001 and retired in 2003 with the rank of lieutenant.
After that, he went to study in the UK, graduated from the Department of Economics at University College London in 2006, joined Goldman Sachs in the same year, resigned to study in the United States in 2008, obtained an MBA from Harvard Business School in 2010, and joined the Russian venture capital fund DST Global as a partner in the same year, mainly for venture capital investment in Internet companies.
DST Global is one of the world's leading Internet investment companies, Zhou Shouzi is mainly responsible for the investment of Chinese Internet companies, Xiaomi, JD.com, Alibaba, Meituan and Kuaishou and other successful companies are inseparable from his early investment, which led the company's successful investment in TikTok's parent company ByteDance in 2013.
In 2015, Zhou Shouzi joined Xiaomi, and during his time as CFO, he managed Xiaomi's IPO, and in July 2018, Xiaomi successfully went public, becoming the first Hong Kong listed company with different rights and the largest IPO in the Hong Kong stock market at that time. Before Zhou was ready to leave Xiaomi, he had become a partner of Xiaomi.
At the beginning of 2021, Zhou officially stepped into ByteDance as the first CFO of the media giant, and 2 months later, he replaced Kevin Mayer as the CEO of TikTok. The New York Times said Zhou was responsible for all of TikTok's "strategic decisions."
After joining ByteDance, Zhou was selected as one of the 2021 Fortune Global 40 Under 40 Business Elites in September 2021, and just as he was preparing to make a big splash on TikTok, the White House began a risk review of foreign technology companies such as TikTok.
To Americans, Zhou Shouzi seems to have always been a "out of the limelight" figure, "Most Americans probably first heard Zhou's name this week." Brooke Erin Duffy, a professor at Cornell University who studies social media platforms, said Zhou's reputation is completely different from those of Silicon Valley celebrities.
94-year-old Intel co-founder Gordon Moore has died
Proposed by "Moore's Law"
Image source: Gordon and Betty Moore Foundation website
Intel Corporation and the Gordon and Betty Moore Foundation announced March 24 that Intel co-founder Gordon Moore died at the age of 94.
Gordon Moore founded Intel with Robert Noyce in 1968 and served as vice president of the company, becoming president and CEO in 1975. Gordon Moore once proposed the famous "Moore's Law": when the price does not change, the number of transistors that can be accommodated on an integrated circuit doubles about every 18-24 months, and the performance will also double. In other words, every dollar of computer performance will more than double every 18-24 months.
The European Union announced that it will aid Ukraine with 1 million shells in the next year
Image source: CCTV News
On March 24, according to CCTV Military quoted by the Associated Press, the leaders of EU member states held a summit in Brussels on the 23rd and agreed to provide 1 million shells to Ukraine in the next year. European Council President Michel said that the EU wants to be a full-fledged player in providing support to Ukraine, including the production, manufacture, delivery of ammunition, etc.
Trump posted that if indicted, it could cause new "death and destruction"
According to the US "Business Insider" website reported on the 24th, former US President Trump posted on social media in the early morning of the same day to hint again that there would be violence, saying that if he was prosecuted by New York prosecutors, it may lead to new "death and destruction". It was the latest move by Trump to anger his supporters and discredit Manhattan District Attorney Alvin Bragg, who was widely believed to be charged in criminal proceedings by Prague.
In addition, according to the US "Capitol Hill" report, former US President Trump posted on social media on the 23rd, calling for the removal of the senior official responsible for investigating him. Trump's comments come after significant progress has been made in each investigation against him.
More than just chatting! ChatGPT announced support for third-party plugins
Photo source: Photo by Liu Xuemei, reporter
On March 23, local time, OpenAI announced that ChatGPT can support third-party plug-in access, which are "tools designed for "language models with security as the core principle" to help ChatGPT access the latest information, run calculations or use third-party services.
Since ChatGPT's database is only up to September 2021, if a user's question relates to events after that point in time, the answers it gives often contain incorrect information. But by accessing plugins, ChatGPT is finally able to access the network and get the latest information.
Currently, only users and developers on the waiting list will be able to use the beta plugin, and OpenAI says it will prioritize a small number of developers and paid users of ChatGPT Plus, and will open it to more users on a larger scale in the future.
10 times faster! Jensen Huang first talked about the dedicated GPU for ChatGPT
Nvidia surpassed Berkshire to become the fifth-largest U.S. stock market capitalization company
NVIDIA GTC Developer Conference was held on March 20~23. On March 21, NVIDIA and Quantum Machines announced the launch of DGX Quantum, the first system to combine GPUs and quantum computing, using the new open-source CUDA Quantum software platform, which provides a revolutionary new architecture for researchers working on high-performance and low-latency quantum classical computing.
Chief among them is the H100 NVL, which stitches together two of Nvidia's H100 GPUs to deploy large language models (LLMs) like ChatGPT. "The only GPU that can actually handle ChatGPT today is the NVIDIA HGX A100. A standard server with four pairs of H100 and dual NVLINK can now be 10 times faster than the former, reducing the processing cost of large language models by an order of magnitude. Huang said.
As of the opening of U.S. stocks on Friday (March 24), NVIDIA (Nasdaq: NVDA) rose more than 4% for the week, with a total market value of more than $660 billion, surpassing the "stock god" Buffett's Berkshire Hathaway and jumping to become the fifth largest listed company in the United States by market capitalization.
Half of the U.S. state is littered with deadly fungi
One third of those infected died
According to the Associated Press, the US Centers for Disease Control and Prevention released a report on March 20 local time that a super fungus called "Candida auris" is spreading at an alarming rate. The first confirmed case was first detected in the United States in 2016, and more than half of the states in the United States have now reported confirmed cases.
According to research, Candida auris can cause serious illness in people with weakened immune systems. One in three infected people in the United States currently dies from the fungus.
According to the US Centers for Disease Control and Prevention, the main threat group of Candida auris is the elderly with a weakened immune system, which is highly contagious and resistant to common antifungal drugs, which is easy to spread in places such as hospitals and elderly care facilities, and can lead to the death of severely ill patients. At present, there is a lack of specific therapeutic drugs. Researchers at the U.S. Centers for Disease Control and Prevention said the coronavirus outbreak is likely to have exacerbated the spread of Candida auris.
Reporter|Li Menglin, Zheng Yuhang, Tan Yuhan
Editors|Tan Yuhan, Lu Xiangyong, Du Hengfeng
Proofreading | Wang Yuelong
| Daily Economic News nbdnews original article|
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