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In the US the government can step in and force you to take that offer. Specifically, they can tell you if you don't accept it the FDIC can take over your bank a
by HWR_14 4y ago
In the US the government can step in and force you to take that offer. Specifically, they can tell you if you don't accept it the FDIC can take over your bank and auction it off for maybe the snickers bar.
Is there such a mechanism in Switzerland? Because at "a snickers bar", a lot of people wouldn't sell out even though it's better for all their depositors. They may be tempted to roll the dice and hope for a giant win. After all, they get way more upside and it's not their money (primarily) they are risking
- andylynch 4y agoIn practical terms no - UBS is by far the largest Swiss bank followed at some distance now by Credit Suisse, and together they are on quick look larger by asset size then all other Swiss banks _combined_.
- H8crilA 4y agoWhether or not a company is bankrupt is not and should not be decided by the shareholders. If it was decided by them they would obviously never declare it bankrupt. The mechanism for "getting paid with a snickers bar" is just a streamlined but still fair version of a restructuring bankruptcy. In a bankruptcy all of the equity gets wiped out and the shareholders no longer have a say in the matters. Morally because they failed to run the company, but also because they positioned themselves to take the greatest gains, and thus should be exposed to absorb the greatest losses. It's not so much specific to any country as it is to the very idea of capitalism / being a shareholder. The fact that a banking regulator gets involved and orders this or that does not necessarily change the fundamental way in which things would happen to another non-bank corporation. Equity would get wiped out, sometimes together with the least secured credit - see "fulcrum security".