Reporting Stefania Spezzati, Oliver Hirt and Elisa Martinuzzi; additional reporting by John O’Donnell; Editing by Paritosh Bansal and Nick Zieminski
World
Exclusive: Swiss authorities, banks mull new rules to prevent bank runs -sources
LONDON/ZURICH, Nov 2 (Reuters) – Swiss authorities and lenders, including UBS (UBSG.S), are discussing new measures to prevent bank runs after Credit Suisse’s rescue earlier this year, four sources familiar with the matter said, a move that could affect billions in deposits.
The talks, which have not been previously reported and are part of a broader review of the country’s banking rules, are intended for the top Swiss banks and could target mainly their wealth clients, two of the sources said.
Among the measures being discussed is the option to stagger a greater portion of withdrawals over longer periods of time, one of the sources said. Imposing fees on exits is also an alternative being discussed, two of the sources said.
Rewarding clients who tie up their savings for longer with higher interest rates is being debated, one of the sources said.
Discussions are in the early stages, according to two sources. The Swiss National Bank and the Swiss Finance Ministry are part of the conversations with lenders, one source said.
A representative for the finance ministry said that the issue of bank runs is part of an overall evaluation of the too-big-to-fail regulatory framework in Switzerland. The Swiss government is due to publish a report in spring next year, he added.
The SNB said the review of too-big-to-fail rules, which focuses on so-called systemically important banks, is ongoing. The central bank declined to comment on ongoing work.
UBS declined to comment.
Reuters could not determine which other banks were involved in the conversations with Swiss authorities.
In Switzerland, UBS, Raiffeisen Group, Zürcher Kantonalbank and PostFinance are deemed systemically important lenders as their failure could cause serious damage to the country’s economy and financial system.
A spokesperson for PostFinance said it is not involved in the discussions while a spokesperson for ZKB declined to comment. A representative for Raiffeisen did not have an immediate comment.
DEPOSIT RUNS
Earlier this year, some regional U.S. banks and Credit Suisse suffered massive deposit runs, causing some to fail and regulators to intervene to prevent a broader financial crisis.
Regulators worldwide have since been grappling with the risk of bank runs, which in the era of digital banking have accelerated in speed.
In the case of Credit Suisse, the Swiss lender suffered unprecedented outflows and came close to a disorderly wind-down in March. Wealth managers tend to have a greater concentration of deposits than some of the retail banking competitors, which emerged as a weakness for the lender.
In the last three months of 2022, the bank, at the time Switzerland’s second-largest lender, was hit by 111 billion Swiss francs of outflows. Another 61 billion Swiss francs left in the first quarter, with the wealth unit which caters to affluent clients hit the hardest.
Its near-implosion prompted the SNB to step in with emergency funding and to facilitate its takeover by UBS, making the country’s biggest bank even larger.
While it’s early days, the measures under discussion in Switzerland are making some people nervous.
They risk penalizing Swiss banks if they were to be introduced only in Switzerland, one of the sources said.
UBS is trying to attract customers with above-market rates on deposits, Reuters reported in October.
The new rules could dent competitiveness or, in a more extreme scenario, push clients to withdraw their money preemptively, the person added.
Our Standards: The Thomson Reuters Trust Principles.
World
Israel keeping its ‘eyes open’ for Iranian attacks during Trump transition period, ambassador says
Israel’s U.N. Ambassador Danny Danon tells Fox News Digital that his country is keeping its “eyes open” for any potential aggression from Iran during the Trump transition period, adding it would be a “mistake” for the Islamic Republic to carry out an attack.
The comments come after Iranian Foreign Minister Abbas Araghchi vowed earlier this week that Iran would retaliate against Israel for the strategic airstrikes it carried out against Tehran on Oct. 26. Araghchi was quoted in Iranian media saying “we have not given up our right to react, and we will react in our time and in the way we see fit.”
“I would advise him not to challenge us. We have already shown our capabilities. We have proved that they are vulnerable. We can actually target any location in Iran. They know that,” Danon told Fox News Digital.
“So I would advise them not to make that mistake. If they think that now, because of the transition period, they can take advantage of it, they are wrong,” he added. “We are keeping our eyes open and we are ready for all scenarios.”
ICC REJECTS ISRAELI APPEALS, ISSUES ARREST WARRANTS FOR BENJAMIN NETANYAHU, YOAV GALLANT
Danon says he believes one of the most important challenges for the incoming Trump administration will be the way the U.S. deals with Iran.
“Regarding the new administration, I think the most important challenge will be the way you challenge Iran, the aggression, the threat of the Iranian regime. I believe that the U.S. will have to go back to a leading position on this issue,” he told Fox News Digital.
“We are fighting the same enemies, the enemies of the United States of America. When you look at the Iranians, the Houthis, Hezbollah, Hamas, all those bad actors that are coming against Israel… that is the enemy of the United States. So I think every American should support us and understand what we are doing now,” Danon also said.
IRAN HIDING MISSILE, DRONE PROGRAMS UNDER GUISE OF COMMERCIAL FRONT TO EVADE SANCTIONS
Danon spoke as the U.S. vetoed a draft resolution against Israel at the U.N. Security Council on Wednesday.
The resolution, which was overseen by Algeria, sought an “immediate, unconditional and permanent cease-fire” to be imposed on Israel. The resolution did not guarantee the release of the hostages still being held by Hamas within Gaza.
“It was a shameful resolution because… it didn’t have the linkage between the cease-fire and the call [for] the release of the hostages. And I want to thank the United States for taking a strong position and vetoing this resolution,” Danon said. “I think it sent a very clear message that the U.S. stands with its strongest ally with Israel. And, you know, it was shameful, too, to hear the voices of so many ambassadors speaking about a cease-fire but abandoning the 101 hostages. We will not forget them. We will never abandon them. We will continue to fight until we bring all of them back home.”
Fox News’ Benjamin Weinthal contributed to this report.
World
Fact-check: What do we know about Russia’s nuclear arsenal?
Moscow has lowered the bar for using nuclear weapons and fired a missile capable of carrying a nuclear warhead into Ukraine, heightening tensions with the West.
Russia’s nuclear arsenal is under fresh scrutiny after an intermediate-range ballistic missile capable of carrying an atomic warhead was fired into Ukrainian territory.
President Vladimir Putin says the unprecedented attack using the so-called “Oreshnik” missile is a direct response to Ukraine’s use of US and UK-made missiles to strike targets deep in Russian territory.
He has also warned that the military facilities of Western countries allowing Ukraine to use their weapons to strike Russia could become targets.
The escalation comes days after the Russian President approved small but significant changes to his country’s nuclear doctrine, which would allow a nuclear response to a conventional, non-nuclear attack on Russian territory.
While Western officials, including US defence secretary Lloyd Austin, have dismissed the notion that Moscow’s use of nuclear weapons is imminent, experts warn that recent developments could increase the possibility of nuclear weapons use.
Here’s what we know about Russia’s inventory of atomic weapons.
How big is Russia’s nuclear arsenal?
Russia holds more nuclear warheads than any other nation at an estimated 5,580, which amounts to 47% of global stockpiles, according to data from the Federation of American Scientists (FAS).
But only an estimated 1,710 of those weapons are deployed, a fraction more than the 1,670 deployed by the US.
Both nations have the necessary nuclear might to destroy each other several times over, and considerably more atomic warheads than the world’s seven other nuclear nations: China, France, India, Israel, North Korea, Pakistan and the United Kingdom.
Of Moscow’s deployed weapons, an estimated 870 are on land-based ballistic missiles, 640 on submarine-launched ballistic missiles, and potentially 200 at heavy bomber bases.
According to FAS, there are no signs Russia is significantly scaling up its nuclear arsenal, but the federation does warn of a potential surge in the future as the country replaces single-warhead missiles with those capable of carrying multiple warheads.
Russia is also steadily modernising its nuclear arsenal.
What could trigger a Russian nuclear response?
Moscow’s previous 2020 doctrine stated that its nuclear weapons could be used in response to an attack using nuclear or other weapons of mass destruction “when the very existence of the state is put under threat.”
Now, the conditions under which a nuclear response could be launched have changed in three crucial ways:
- Russia will consider using nuclear weapons in the case of a strike on its territory using conventional weapons, such as cruise missiles, drones and tactical aircraft.
- It could launch a nuclear attack in response to an aggression by a non-nuclear state acting “with the participation or support of a nuclear state”, as is the case for Ukraine.
- Moscow will also apply the same conditions to an attack on Belarus’ territory, in agreement with President Lukashenko.
Is there a rising nuclear threat?
The size of the world’s nuclear stockpiles has rapidly decreased amid the post-Cold War détente. The Soviet Union had some 40,000 warheads, and the US around 30,000, when stockpiles peaked during the 1960s and 70s.
But FAS warns that while the overall number is still in decline, operational warheads are on the rise once again. More countries are also upgrading their missiles to deploy multiple warheads.
“In nearly all of the nuclear-armed states there are either plans or a significant push to increase nuclear forces,” Hans M. Kristensen, Director of the Nuclear Information Project at the Federation of American Scientists (FAS), said in June this year.
Is the West reacting?
When Putin approved the updated nuclear protocol last week, many Western leaders dismissed it as sabre rattling.
German Foreign Minister Annalena Baerbock said Germany and its partners would “not be intimidated” and accused Putin of “playing with our fear.”
But since Russia used a hypersonic ballistic missile capable of carrying a nuclear warhead in an attack on Dnipro, European leaders have raised the alarm.
“The last few dozen hours have shown that the threat is serious and real when it comes to global conflict,” Polish Prime Minister Donald Tusk said on Friday.
According to Dutch media reports, NATO’s secretary-general Mark Rutte is in Florida to urgently meet President-elect Donald Trump, potentially to discuss the recent escalation.
NATO and Ukraine will hold an extraordinary meeting in Brussels next Tuesday to discuss the situation and the possible allied reaction, according to Euronews sources.
World
Rental home investors poised to benefit as mortgage rates, high home prices sideline buyers in 2025
LOS ANGELES (AP) — Rental homes will remain an attractive option next year to would-be homebuyers sidelined by high mortgage rates and rising home prices, analysts say.
American Homes 4 Rent and Invitation Homes are two big real estate investment trusts poised to benefit from the trend, say analysts at Mizuho Securities USA and Raymond James & Associates.
Their outlooks boil down to a simple thesis: Many Americans will continue to have a difficult time finding a single-family home that they can afford to buy, which will make renting a house an attractive alternative.
It starts with mortgage rates. While the average rate on a 30-year mortgage fell to a two-year low of 6.08% in late September, it’s been mostly rising since then, echoing moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
The yield, which has hovered around 4.4% this week, surged after the presidential election, reflecting expectations among investors that President-elect Donald Trump’s proposed economic policies may widen the federal deficit and crank up inflation.
Analysts at Raymond James and Associates say they see mortgage rates remaining “higher for longer,” given the outcome of the election. Last week, they reiterated their “Outperform” ratings on American Homes 4 Rent and Invitation Homes, noting “we are increasingly confident in the longer-term outlook for single-family rental fundamentals and the industry’s growth prospects.”
They also believe the two companies will continue to benefit from “outsized demographic demand for suburban homes,” and the monthly payment gap between renting and owning a home, which they estimate can be as much as 30% less to rent.
Analysts at Mizuho also expect that homeownership affordability hurdles will maintain “a supportive backdrop” and stoke demand for rental houses, helping American Homes 4 Rent and Invitation Homes to maintain their tenant retention rates.
The companies are averaging higher new and renewal tenant lease rates when compared to several of the largest U.S. apartment owners, including AvalonBay, Equity Residential and Camden Property Trust, according to Mizuho. It has an “Outperform” rating on American Homes 4 Rent and a “Neutral” rating on Invitation Homes.
Shares in Invitation Homes are down 1.2% so far this year, while American Homes 4 Rent is up 4.4%. That’s well below the S&P 500’s 24% gain in the same period.
While individual homeowners and mom-and-pop investors still account for the vast majority of single-family rental homes, homebuilders have stepped up construction of new houses planned for rental communities.
In the third quarter, builders broke ground on about 24,000 single-family homes slated to become rentals. That’s up from 17,000 a year earlier. In the second quarter, single-family rental starts climbed to 25,000, the highest quarterly total going back to at least 1990, according to an analysis of U.S. Census data by the National Association of Home Builders.
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