State Street will remain custodian of the Swiss social security fund, Alters-und Hinterlassenenversicherung (AHV) after all, reports Bloomberg (paywalled). The decision was made following a vote in the lower house in Bern, which saw a 98-89 split in favour of the bank keeping its mandate. State Street had come under scrutiny after Switzerland’s Economic Affairs and Taxation Committee (WAK) filed a motion to strip it of its custodian mandate for the AHV compensation fund, as covered here on PostTrade 360°.
The WAK’s motion had stemmed from fears that US president Donald Trump might hit Switzerland with the same tariffs he is putting on the EU. The argument was that it would be better for national security to have Swiss social security funds handled by a Swiss bank, not an American one.
According to Bloomberg, the majority voters dismissed fears that Trump’s administration could strong-arm State Street into withholding payments to put pressure on Switzerland. The Swiss government has also advised that halting State Street’s mandate before its first five years are up could mean “significant extra costs” – the American bank only got the custody mandate in July 2024, taking over UBS’ long-running 26-year custodianship.
