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10 October 2008
BERN — The Swiss Federal Banking Commission said Thursday it set up special measures to protect deposits at the Swiss branch of Iceland’s troubled Kaupthing bank.
Kaupthing’s Geneva branch was forbidden to pay out any money until an investigation in the bank’s finances is complete, the banking commission said in a statement. Deposits of up to CHF 5,000 (EUR 3,200) are excused from the order, it added.
Switzerland’s deposit insurance guarantees up to CHF 30,000.
The commission said it appointed two investigators to review the situation and the money in Kaupthing’s Geneva branch, because of the "tense liquidity situation" of the entire Kaupthing group.
Iceland on Thursday stopped trading on its stock exchange for two days and took control of Kaupthing, the country’s leading bank.
Kaupthing’s Swiss branch opened in July, aggressively marketing its high interest rate and private banking services for wealthy clients.
James Nason, a spokesman for the Swiss Bankers Association, said around 1,700 clients and about CHF 30 million are invested in Kaupthing’s Geneva branch.
[AP / Expatica]