Historic No. 1 bank collapses: Desperate account holders | Better to withdraw everything before it's too late

The global economic crisis isn't sparing even the major financial giants; this bank is having to make major cuts. What's happening?

When a bank fails, it means it is no longer able to honor its debts , that is, return money to depositors or repay loans. This usually happens because it has issued too many bad loans or has suffered significant losses due to bad investments or fraud, finding itself insolvent.

Bankruptcy can be triggered by a liquidity crisis , when the bank is unable to meet customer withdrawals or other deadlines. If the situation is not resolved, the supervisory authority (such as the European Central Bank or the Bank of Italy) intervenes to manage the crisis.

In the event of bankruptcy, protection mechanisms are activated for account holders. The Interbank Deposit Protection Fund (FITD) guarantees deposits up to €100,000 for each account holder per bank, reimbursing account holders within a few business days.

For amounts exceeding €100,000, account holders become creditors of the failed bank , and recovery of the funds depends on the liquidation of the bank's assets. In some cases, a resolution may be implemented, involving the sale of part of the bank or the application of a "bail-in," which requires shareholders and bondholders to absorb losses as well.

Precarious global situation

In recent years, even large banks have faced significant difficulties . Internationally, a case in point was the failure of Silicon Valley Bank in March 2023. This bank, specializing in technology startups, suffered a rapid "bank run" due to a combination of investments in long-term securities devalued by rising interest rates and a concentrated, uninsured customer base.

In Italy, the period between 2015 and 2017 saw several crises involving banks of significant size, though not comparable to the global giants. Examples include the resolutions of Banca Marche, Banca Popolare dell'Etruria e del Lazio , CariChieti, and Cassa di Risparmio di Ferrara, as well as the compulsory administrative liquidation of Banca Popolare di Vicenza and Veneto Banca.

Crisis and staff cuts

UBS, one of the world's leading banks , has initiated a significant reorganization that will impact its workforce. The plan calls for the reduction of 180 Italian employees, primarily affecting the Fiduciary and ESE divisions. The primary goal is to contain costs , and the institution is seeking to achieve this through agreements with unions.

Considering that the bank employs approximately 600 people in Italy, these cuts represent nearly a third of its total workforce. This decision is part of a broader global trend in the banking sector, where leading institutions such as Commerzbank, Citi, Goldman Sachs , JPMorgan, HSBC, and Morgan Stanley are adopting similar measures, focusing on layoffs to increase operational efficiency and contain expenses.