The emergency takeover of Credit Suisse by UBS for a pittance and solid financial guarantees from the authorities is highly criticized in Switzerland.
“All the other options were, in our opinion, more risky for the State, the taxpayer, the Swiss financial center and the international markets”, affirms Ms. Keller-Sutter.
She explains that she has come to the conclusion in recent weeks that although liquidating a global systemically important bank like Credit Suisse is legally possible thanks to the “too big to fail” law, “in practice, the economic damage would be considerable”.
In addition, she argues, “Switzerland would have been the first country to liquidate a global systemically important bank”. “Now was clearly not the time to experiment.”
The government, the Swiss central bank (SNB) and Finma, the market watchdog in Switzerland, “agreed on the fact that a reorganization or bankruptcy of CS with a separation of Swiss activities, as provided for the emergency plan + too big to fail +, would probably have triggered an international financial crisis”, indicates the minister.
According to a poll published Friday by the Swiss public radio and television, a majority of Swiss (54%) disagree with the takeover of Credit Suisse by UBS.
“That many have rage in their stomachs, I understand it very well”, assures the minister. “I admit that I too have a hard time accepting it. Especially when management errors have contributed to this situation”, but, she continues, “the solution adopted was the one that best protected everyone”.
In the event of nationalization, she explains, the Confederation should have assumed all the risks.
Mrs. Keller-Sutter also asserts that no foreign pressure has been exerted on Switzerland. “No one pushed us in any particular direction. But it was clear to everyone, including ourselves, that a cleanup or liquidation of CS would cause serious international disruption in financial markets.”
The minister also sweeps away those who accuse the authorities of having acted too late when Credit Suisse had been in turmoil for two years, entangled in a series of scandals.
“My department, the SNB and Finma discussed emergency scenarios already in January – on my second day at work as finance minister. This had to be done behind the scenes so as not to damage confidence in CS”, she assures.
And “I informed the entire Federal Council (government) of the emergency scenarios at the beginning of February”, she adds.
