FlowBank: Swiss Bank/Broker Bankruptcy Case

Investing / Brokers
96

If only we were in the US - This sounds like it would have made a juicy Netflix documentary :clown_face:

97

“What’s next after Flowbank”

I read it as “What’s the next bank to follow Flowbank” ?
Not a nice ad :smiley:

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98

Seems like the CEO of FlowBank has a different view on the state of the FlowBank (which shouldn’t come as a surprise):

FlowBank-CEO Charles Henri Sabet: «Die Bank ist definitiv nicht insolvent» | MoneyToday (German only)

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99

Colateral effect for a stable coin

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100

For those curious about the bankruptcy process, looks like insured (100k) cash is being delivered, but there’s a gap of 50M in assets (out of 390M), that’s pretty surprising for a bank.

Shares were segregated and are being transferred (with option of liquidating and transferring cash).

So seems like a pretty bad idea to ever have >100k cash esp at a non established player. Shares were safe as expected.

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101

The bet here is that the next CS will also be safe.

I have been lucky when a bank went bust once, now I would only have >100k in a cantonal bank

102

Any fiables source you can provide ? I am interested about the liquidation process and would be glad to have reliable sources :pray:t2:.

103

The 17 CHF I had at FlowBank were quickly and successfully recovered. I didn’t have any shares.

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104

This was from Le Temps

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105

The Poor Swiss has summarised a few things about Flowbank bankruptcy. Maybe interesting for one or the other. Also interesting to see how money, shares and fractional shares were returned. Also interesting that Saxo and Swissquote were prioritized in the return process.

Cash under 100k:

Overall, it took about two weeks for people to get back their cash.

Cash above 100k:

(
) this will take longer, since these assets will then be considered as standard assets and will be returned (if possible) during standard bankruptcy proceedings.

Return of shares:

(
) impacted customers needed to create another broker account if they did not already have one. (
) They also did some brokers in priority (like Saxo and Swissquote) while others took longer (like Interactive Brokers).

Fractional shares:

It appears that liquidators did not really know what to do with them and kept delaying a decision. In the end, fractional shares will have to be sold by the liquidators and then each customer would get back its fraction in cash, through a bank transfer. As of early October, at least some investors (maybe all) did not yet get back their fractional shares. (
) It appears the liquidators were not prepared to deal with fractional shares at all.

My learning: Don’t buy fractional shares.

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106

Yeah, I’m glad I didn’t start using fractional shares with IBKR. Pity they don’t offer recurring investments without it.

107

Only the fractional part of the share was an issue I assume, unless you have BKR.A it probably doesn’t matter :slight_smile:

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108

So just to be sure

If I buy 0.3 x 4 shares
How much is considered fractional?

0.2 or 0.3 x 4 ?

109

0.2

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110

Looks like the FinTech wasn’t so digital after all :slight_smile:
Man arbeite mit einer bestehenden Bankinfrastruktur, die weder ein Core-Banking-System noch einen automatisierten Prozess enthalte, der die Übertragung von Wertschriften erleichtere, fĂŒhrt der Liquidator aus – zumindest von aussen betrachtet hĂ€tte man von der ambitionierten Digital- bzw. Online-Bank IT-mĂ€ssig anderes erwartet.

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