London and Switzerland are seeking ways to dodge the global minimum tax Biden is pushing at the G7

Joe Biden touching Boris Johnson at the g7 summit in the UK
Prime Minister Boris Johnson speaks with US President Joe Biden at Carbis Bay Hotel on June 10, 2021, near St Ives, England.

  • G7 finance ministers agreed a global corporate minimum tax of 15% at the UK summit on Saturday.
  • The plan is aimed at tech giants, but some nations worry their financial districts will be hit.
  • Switzerland is discussing how it will mitigate the tax and The City of London wants an exemption.
  • See more stories on Insider’s business page.

The City London and Switzerland are aiming to mitigate the effects of the global minimum tax plan agreed by the G7 group of nations.

On Saturday, G7 finance ministers meeting in Cornwall, UK, agreed a global corporate minimum tax of 15%, which companies would need to pay in each country where they operate.

The plan was first put forward by US Treasury Secretary Janet Yellen.

Many companies register themselves in countries with favorable tax rates, like Ireland and Switzerland. The G7 plan is an attempt to impose extra costs on that practice.

Activists have long complained that companies like Google, Amazon, and Facebook avoid paying millions in tax due to their use of tax havens.

But the City of London and Switzerland are already working to ensure they don’t get badly hit by the minimum tax rate, as they fear it will make their financial districts less attractive.

The central Swiss government has discussed ways to offset the G7’s minimum tax rate with the 26 Swiss cantons, according to the Financial Times.

Possible measures include social security deductions and tax credits, the FT said.

Ernst Stocker, the finance chief of the Zurich canton, told the SRF broadcaster on Monday that the country needs to stay attractive to businesses, and may need to introduce new tax deductions.

In the UK, Chancellor Rishi Sunak is worried that banks based in the City of London, whom he says pay adequate tax, will be wrongly dragged into the 15% rate.

London’s finance sector is of disproprtionate importance to the UK economy, and is a hub for business activities from all over the world.

Sunak is attempting to get the City of London an exemption to any minimum tax rate, according to reports.

A source close to the G7 talks told the Guardian that several other EU countries want financial services to be excluded from the minimum rate.

“The Europeans don’t want to pull too many companies into this, they’re mostly interested in US tech,” the source said

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Credit Suisse is overhauling its asset management business and has suspended bonuses after Greensill collapsed

Credit Suisse
The logo of Swiss bank Credit Suisse is seen at a branch office in Bern, Switzerland October 28, 2020. Picture taken October 28, 2020.

  • Credit Suisse is shaking up its asset management business following the collapse of Greensill.
  • Ulrich K├Ârner will become the new CEO of the bank’s asset management business from April 1.
  • Three senior asset management employees have temporarily stepped aside.
  • See more stories on Insider’s business page.

Credit Suisse is overhauling its asset management business as it faces regulatory investigations into its dealings with Greensill Capital, warning on Thursday that its results and client confidence could be hit by the finance firm’s collapse.

Switzerland’s second-biggest bank and its asset management arm are reeling from the implosion of around $10 billion of funds related to British supply chain financier Greensill, heaping pressure on CEO Thomas Gottstein.

Credit Suisse said in its annual report that Swiss regulator FINMA was looking into the matter and reviewing its impact in relation to the bank’s so-called Pillar 2 buffer, which is capital banks hold against risks.

“We can confirm that we have also imposed a Pillar 2 buffer in this context as stated by the bank in its annual report,” FINMA said, adding it was in contact with other authorities.

Credit Suisse stuck to its guidance on capital and said plans to buy back at least 1 billion Swiss francs ($1.1 billion) worth of stock this year were still on.

The bank named Ulrich Koerner as its new head of asset management and said it would separate the business into its own division from April 1. It has been part of the international wealth division run by Philipp Wehle.

Koerner will return to Credit Suisse from arch-rival UBS, where he most recently served as adviser to the CEO from 2019 to 2020. He ran UBS Asset Management from 2014 to 2019. Koerner was previously a senior executive at Credit Suisse Financial Services and ran the Swiss business.

Current asset management head Eric Varvel, who is also chairman of Credit Suisse’s investment bank and head of its U.S. holding company, will focus on his other roles.

Credit Suisse’s annual report said some unidentified fund investors had threatened litigation over the Greensill affair and the ultimate cost may be “material” to operating results.

“The portfolio manager has been informed that certain of the notes underlying the funds will not be repaid when they fall due,” it added.

“We might also suffer reputational harm associated with these matters that might cause client departures or loss of assets under management,” it said.

Three senior asset management employees who helped oversee the Greensill funds have temporarily stepped aside.

The annual report showed the bonuses for a number of senior employees involved, “up to and including Executive Board members”, had been suspended.

Credit Suisse shares gained 2.5%.

The new structure bucks a trend for blending Credit Suisse products and services in a seamless offering to its wealthy clients. It could, however, help address suggestions that the model lent itself to internal conflicts of interest.

Asset Management lost 39 million Swiss francs ($42 million)before taxes last year after a hefty writedown on an investment in a U.S. hedge fund.

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