News from Appalachia: UBS Is not the Kind of Bank the Swiss Think It Is

Few outside of Switzerland know what UBS stands for (or used to stand for): Union Bank of Switzerland. Few inside of Switzerland know that it is not really a Swiss bank.

Before English ruled the world, the bank was called Schweizerische Bankgesellschaft (SBG), or Union Bank of Switzerland (UBS) in its international business operations–its logo worked for both English and German.

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When the Schweizerische Bankgesellschaft merged with the Schweizerischer Bankverein (Swiss Bank Corporation, or SBV for short) in1998, it became the second-largest bank in the world and simply called itself UBS, keeping the three interlocked keys of the SBV as its logo, but dropping the pretense that UBS stands for anything.

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Two things are noteworthy: first, the acronym was based on the name of the bank in English, not German. And second, the fact that UBS does not really stand or anything anymore detaches the name from Switzerland–the origin of the “S” in the corporate name. Both indicate that UBS is downplaying its Swissness: with the merger and name change in 1998, they were positioning themselves as a global financial conglomerate that happens to be headquartered in Zurich. In positioning themselves as a global player, UBS clearly was interested in shedding any references that point to any national origin.

Most people outside of Switzerland do not see UBS as a Swiss bank–they see UBS as a global financial conglomerate, and in some places there have been protests against UBS because it was at the heart of a local conflict. One example is this demonstrations against UBS during a labor dispute involving cleaning staff in London in 2010:

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Protests against UBS in London in 2010. (Source: demotix.com, accessed 6/1/13)

In December 2012, global protest against UBS even hit home base: as the banking giant was negotiating a settlement with US and British authorities regarding its manipulation of interest rates, protesters gathered in the Paradeplatz in Zurich, where both UBS (center) and CS (right) are headquartered, and formed a giant red fish.

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Protests against UBS in Zurich, December 2012 (nyt.com, accessed 6/1/13)

More recently,  on May 24, 2013, activists entered the Knoxville, TN, branch of UBS wealth management services and refused to leave. (By the way, the web site of the Knoxville branch in no way communicates that UBS is a Swiss bank.) They protested against UBS because it is financing coal mining operations in Appalachia which is leading to mountaintop removals and extensive environmental destruction.

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Protests against Knoxville UBS branch in May 2013 (mountainjustice.org, accessed 6/1/13)

Protesters also staged a sit-in in front of the UBS Knoxville branch, locking themselves to the effigy of an investment banker. The UBS Hands Off Appalachia campaign even has its own Facebook page. Protests against UBS also occurred in other parts of the Appalachia region, such as in Lexington, KY.

This UBS appears to have little in common with the UBS most Swiss still see as one of their national brands. Citizens of small states see major corporations that grew in their countries as national treasures. Nokia in Finland is the textbook example. No American seriously would identify with Bank of America, and if it were to go out of business (which it won’t because it is too big to fail) few would be upset about it (except for those who lost money). If UBS, on the other hand, were to go out of business (which it won’t because it is way too big to fail–and already was bailed out once in 2008) it would be regarded as the demise of a national symbol and a national humiliation. The demise of Swissair in 2001 is a textbook example: thousands demonstrated against “United Bandits of Switzerland” because UBS failed to make cash available to Swissair before its grounding–one national symbol betraying another. More on that in a different post.

Big corporations in small states fill citizens with pride. The message is that even small states and their economic institutions can be global players, and the well-being of these corporations has great symbolic (as well as economic) value for small states. Global corporations fill citizens of small countries with pride and give them a sense of importance in a globalized world that otherwise has little regard for them. The Swiss still see the two large Swiss banks UBS and CS (Credit Suisse) as national institutions even though this is not how the two banks see themselves.

UBS has been the eye of the storm in the ongoing taxation conflict between Switzerland and other countries, most notably the United States–more on that in another blog. Many Swiss resent the fact that Swiss banks are cooperating with the US government to prosecute large-scale tax evaders and thus, in their view, are selling out the Swiss bank secret–this also will merit another blog entry. UBS increasingly sees the Swiss bank secret as a PR debacle that is bad for prestige and business. For the Swiss, and particularly for conservatives, the bank secret still is a matter of national identity.

UBS profits greatly from its Swiss home base: Switzerland offers unparalleled political stability, a highly developed infrastructure, and a good quality of life, and he Swiss government pursues market-friendly policies from which the financial sector profits greatly–never in its modern history has the Swiss government restricted the flow of capital. But in the age of globalization no financial institution with a global reach wants to be defined in terms of national origin. In short, in times of globalization large corporate conglomerates do their best to de-nationalize themselves. So the story of UBS in Switzerland tells of a growing conflict between a post-national financial conglomerate and a public that still largely regards UBS as a national treasure.

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