At the market level, the European banking giants suddenly exposed a major negative news. According to a new report from Bloomberg, the US Justice Department has stepped up its investigation into UBS and Credit Suisse for sanctions violations. Affected by this news, UBS Group shares in the European market once suffered a flash crash, the maximum intra-day decline of nearly 8%; Shares of UBS fell as much as 3.6 per cent after the US market opened in the evening.
In addition, the latest moves of the United States in the chip field have also caused concern. The United States is expected to indefinitely extend the exemption for South Korean chip manufacturers Samsung and SK Hynix to import US chip equipment from their factories in China, Yonhap news Agency reported on the 27th. Several sources said the US could make an announcement as early as this week.
The banking giant suddenly turned negative
Big European banks have suddenly come out with a big piece of bad news. According to a new report from Bloomberg, the US Justice Department has stepped up its investigation into UBS and Credit Suisse for sanctions violations.
The US Justice Department is investigating Credit Suisse for helping wealthy Russians evade sanctions, according to people familiar with the matter. The matter began earlier this year when the Justice Department issued subpoenas to a series of banks, but has now become a full-blown investigation into Credit Suisse.
The Justice Department is also investigating possible compliance issues at UBS, according to people familiar with the matter. The investigation is still in its early stages and may not lead to charges or a settlement.
One of the people said the Justice Department has asked for information about how banks handled the accounts of sanctioned customers over the past few years.
Affected by this news, UBS Group shares once staged a flash crash in the European market, plummeted, and stopped trading, with a maximum intra-day decline of nearly 8%. Shares recovered some of their losses when trading resumed. Shares of UBS fell as much as 3.6 per cent after the US market opened in the evening.
The StoXX Europe 600 banking index was little changed during the day's trading.
According to Reuters, UBS declined to comment on the US Department of Justice's widening investigation into its alleged Russia-related wrongdoing.
Credit Suisse Group is the second largest bank in Switzerland and is one of 30 globally systemically important banks recognized by banking regulators around the world. In March this year, Credit Suisse Group was finally on the verge of bankruptcy due to the chain effect of the Silicon Valley Bank and Signature Bank in the United States. With the support of the Swiss National Bank, UBS took over Credit Suisse and began to buy it.
Since the takeover process began at the end of March, UBS shares have risen nearly 50 per cent and at one point were trading close to their highest level in 15 years. After the acquisition, UBS's wealth rose by a third to $4 trillion.
Major decision of the United States
On September 27, the observer network quoted Yonhap News Agency as reporting that the United States is expected to indefinitely extend the exemption for South Korean chip manufacturers Samsung and SK Hynix to import American chip equipment from their factories in China. According to the report, several sources said that the United States will make a relevant announcement as early as this week.
On October 7, 2022, the U.S. government escalated its policy of suppressing the chip industry. However, under the strong opposition, Samsung and SK Hynix factories in China obtained an exemption from importing related equipment, without applying for additional permits from the US government, and the exemption period is 1 year, until October 11 this year.
On Sept. 22, Trade, Industry and Resources Minister Bang Moon-kyu met with U.S. Deputy Commerce Secretary Don Graves in Seoul to seek "active cooperation" from the U.S. Department of Commerce to resolve uncertainties over chip export controls and investment subsidies.
According to Yonhap News agency, the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce has discussed with Samsung and SK Hynix specific details such as the list of equipment that can be imported, and has actually reached an agreement. Once a formal decision is made, the Commerce Department will notify the two companies and publish it in the Federal Register (U.S. government Gazette).
Regarding the timing of the possible announcement by the US side, a source said that it is likely to be released within this week, but the timing of the final notification remains to be seen. There is also speculation that the announcement could be delayed until next week because of the threat of a federal government shutdown.
Samsung and SK Hynix declined to comment on the news.
It is worth mentioning that, as the world's two largest memory chip manufacturers, Samsung and SK Hynix have been deeply engaged in the Chinese market for many years. Among them, Samsung Electronics produces NAND flash memory in Xi 'an, China, and SK Hynix produces DRAM chips at its Wuxi plant and NAND flash memory in Dalian, both of which have invested billions of dollars.
As of the end of June this year, the two South Korean companies controlled nearly 70 percent of the global dynamic semiconductor memory (DRAM) and 50 percent of the flash memory chip (NAND) market, according to data from Trend Force Jibang Consulting.