Finance

Citigroup lifts banking curbs on gun makers and sellers

Published

3 days ago

June 3, 2025

Business Finance News

Signage at a Citibank branch in New York, US, on Sunday, Jan. 12, 2025.

Michael Nagle | Bloomberg | Getty Images

Citigroup on Tuesday ended a seven-year-old policy restricting how it provides banking services to firearm manufacturers, sellers and resellers.

The bank launched the policy in March 2018 after a teenage gunman killed 17 people and injured more than a dozen in a mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, on Feb. 14 that year.

Citi said at the time that it would require clients to “adhere to these best practices: (1) they don’t sell firearms to someone who hasn’t passed a background check, (2) they restrict the sale of firearms for individuals under 21 years of age, and (3) they don’t sell bump stocks or high-capacity magazines.”

The bank’s policy applied only to its business clients, ranging from small businesses to Fortune 500-sized companies. It did not restrict how Citi’s personal banking customers used their cards. Citi says it provides banking services to more than 19,000 companies globally.

“As a society, we all know that something needs to change. And as a company, we feel we must do our part,” Citigroup Executive Vice President of Enterprise Services and Public Affairs Ed Skyler said in 2018.

But Skyler says things have changed. “The policy was intended to promote the adoption of best sales practices as prudent risk management and didn’t address the manufacturing of firearms,” he wrote Tuesday in a blog post announcing that Citi “will no longer have a specific policy as it relates to firearms.”

“Many retailers have been following these best practices,” Skyler wrote, “and we hope communities and lawmakers will continue to seek out ways to prevent the tragic consequences of gun violence.”

A spokesperson for the March for Our Lives, a gun-control advocacy group organized in part by students who survived the Parkland massacre, didn’t immediately respond to a request for comment.

The change at Citigroup comes amid broader political pressure over so-called “debanking,” with influential tech leaders and right-wing officials having alleged in recent years that the Biden administration was improperly blocking certain people, including cryptocurrency proponents and conservatives, from banking services.

That argument hasn’t gone away since President Donald Trump returned to the White House; he confronted the CEOs of America’s two largest banks — Bank of America and JPMorgan Chase — with similar complaints at the World Economic Forum in Davos, Switzerland, earlier this year. Both banks said at the time that they would never close an account for political reasons. Bank of America said, “We welcome conservatives and have no political litmus test.”

Citi said Tuesday that it would “update our employee Code of Conduct and our customer-facing Global Financial Access Policy to clearly state that we do not discriminate on the basis of political affiliation in the same way we are clear that we do not discriminate on the basis of other traits such as race and religion. This will codify what we’ve long practiced, and we will continue to conduct trainings to ensure compliance.”

Banking executives have repeatedly said they terminate banking services only when there are issues with anti-money laundering laws or know-your-client regulations, not because of political affiliations.

“We bank 70 million American consumers so our bank is open to everybody,” Bank of American CEO Brian Moynihan later said.

Finance

Stocks making the biggest moves midday: WOOF, TSLA, CRCL, LULU

Published

7 hours ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

9 hours ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”