Everyone knows the adage that when all and sundry are buying in the market it is time to sell. In the same fashion, when Swiss business news becomes prime time English language radio material in the country, one has to question whether it is overdone. Tuesday morning World Radio Switzerland reported on the cloud of UBS’s sub-prime woes and the silver lining that is apparently being seen by the other banks in the country. The bottom line of this story is that UBS is apparently losing accounts to the competition as customers are worried about its solvency in the wake of write-downs totalling $37 billion over the last few months. A number of senior private bankers have gone on record as stating that account openings in the first quarter of 2008 are above budget and the implication is that UBS is suffering. It’s a great story, but does it bear up to scrutiny? There is no smoke without fire, but this story does seem to your correspondent to be driven by the media rather than cold facts. It is true that some account teams have left UBS and taken clients with them, but that happens at any time, especially after bonuses are declared in February. If you consider the rocky markets of the past few months, defections of clients and account people are not much of a surprise as clients become disaffected with their bank and seek to move onto pastures new. Don’t forget that the quotes in the press here talk about openings of new accounts, but not net inflows and not about closing of accounts by unhappy customers. As for reports that JP Morgan experienced inflows of over SFr4 billion from UBS in one week at the end of March, neither bank would comment on this, but it seems a little fanciful given that this would be an increase of over 10 per cent of assets under management in one week for the Swiss arm of the US bank which has not been immune to the sub-prime situation itself. Swiss papers are also noting that UBS lost some SFr21 billion in assets invested in mutual funds between March 2007 and March 2008. They suggest that this move of funds is in favour of Pictet. WealthBriefing reported on this “movement” of funds in early February as the shift took place in 2007 before the extent of the sub-prime crisis was known. At the time we noted that the shift in market share was not necessarily due to transfer of assets, but could be due to changes in investment strategy and the fact that the figures referred only to Swiss authorised funds. Furthermore, international clients have their non invested funds in fiduciary deposits or money market funds to avoid taxation so whilst a UBS client’s deposit may be with UBS in another country, it is just as likely to be with another bank altogether. And domestic deposits are insured by the government. This point was made by Jean-Pierre Danthine, managing director of the Swiss Finance Institute and a professor at the University of Lausanne Faculty of Business and Economics, during a recent interview between himself, Professor Darrell Duffie of Stanford and the Swiss Magazine Bilan. In an e-mail exchange Professor Danthine expressed himself surprised with the newspaper articles although he noted that he has no access to current hard data. A UBS spokesman could offer no definitive comment as the first quarter results have yet to be declared, but she directed your correspondent to statements from senior management made in Swiss newspapers over the weekend. These comments suggest that growth in AuM at UBS will be slower and that there will be some reduction in domestic AuM but that this will be more than compensated for by international markets. UBS has certainly suffered a huge blow to its reputation and lost much more than just money. But there is no suggestion that it is going to lose its place as the number one provider of wealth management services world wide (by market share) in the foreseeable future.