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UBS latest bank in firing line

Thursday, July 24, 2014 - 01:37

UBS takes its turn dealing with the onslaught of litigation against the banking sector. The Swiss group has been ordered to pay $1.48 billion in bail as part of a French tax evasion probe. Joanna Partridge reports.

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It's just the latest big charge to be levied against a bank. This time - Switzerland's UBS ordered to pay a 1.1 billion euro guarantee by French judges. The French prosecutor's office says it reflects the size of the fine it could face - if found guilty of helping wealthy French customers to avoid tax. UBS had previously been told it was under formal investigation in France over allegations it laundered the proceeds of tax evasion. The Swiss lender said in a statement it considers the legal basis for this sum, and the calculation, to be "deeply flawed" and would appeal. UBS has previously been put under formal investigation by a French prosecutor on different charges. There's also the threat of other fines and settlements hanging over UBS - relating to alleged collusion and manipulation of foreign exchange rates. One estimate says the bank could face up to $8 billion in fines and settlements relating to that. But the Swiss bank isn't alone in this - and calculating the liabilities can be little better than guesswork. Andrea Williams from Royal London Asset Management. SOUNDBITE (English) ANDREA WILLIAMS, SENIOR FUND MANAGER, ROYAL LONDON ASSET MANAGEMENT, SAYING: "You just don't know what's coming next and what the size of the charge could be. Nobody thought that BNP would have to settle for the 7 billion or whatever it was that they did, I mean it started off as 500 million. And I think the problem is you can't read across to other banks, each charge is different depending on the scale and how long the crime was ongoing as it were." Banks have been working to clean up their act - but the shadow of their alleged past misdeeds doesn't appear to have gone away.

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UBS latest bank in firing line

Thursday, July 24, 2014 - 01:37