Swiss Re to Start Using HSBC's Chinese Bank for Custodian Services

By John Letzing

ZURICH―-Swiss reinsurance giant Swiss Re AG will begin using HSBC Holdings PLC's Chinese bank for custodian services, a move that further ties Switzerland to China's currency.

HSBC said it's the first custodian bank in China to service a Switzerland-based entity qualified to invest in China's renminbi-denominated markets.

An official at Zurich-based Swiss Re said the development is "an important step in Swiss Re's business aspirations."

Switzerland is vying with other countries, including Germany and the U.K., to become a hub for China's currency, as China seeks to expand the use of the renminbi for global trade and investment. Earlier this year, China extended a program for qualified foreign institutional investors to Switzerland, which included an allocation of 50 billion renminbi ($8 billion).

Last April, Swiss officials disclosed that state-owned China Construction Bank, or CCB, had applied for a banking license in Switzerland. That followed an agreement between the central banks of Switzerland and China last year, which allowed them to buy and sell their respective currencies.

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