AFP, published on Wednesday, April 12, 2023 at 01:54
Swiss parliamentarians protested on Tuesday following seeing “the red carpet of state aid” rolled out once once more to save a bank mismanaged by greedy leaders, during an extraordinary session devoted to the hasty takeover of Credit Suisse by its competitor and compatriot UBS.
In front of the elected officials meeting in extraordinary session for three days, the President of the Swiss Confederation, Alain Berset, came to defend the plan drawn up in an emergency on the weekend of March 18 and 19 to avoid a bankruptcy of Credit Suisse, without asking their opinion neither to parliamentarians nor to shareholders.
“Time was running out” and the Federal Council (Swiss government) sought “the best possible solution to avoid a financial crisis with incalculable consequences” for the financial centre, Switzerland as a whole and the rest of the world, he said. asserted before the Upper House.
But lawmakers have taken turns criticizing the chosen solution, which radically alters the economic landscape of the wealthy Alpine country, much of whose prestige and appeal rests on a stable, healthy and trusted banking sector.
The takeover, in the words of the president, “shaken Switzerland” where there are concerns regarding the consequences for employment of this merger because of the many duplicate positions, but also the influence that will have the new financial juggernaut on the country’s economy.
– Loup de Wall Street –
Hansjörg Knecht, entrepreneur and elected representative of the Center Democratic Union (radical right), did not fail to recall that family businesses and SMEs must assume the risks they take and their leaders pay the price by case of difficulties.
The two banks see themselves on the contrary “rolling out the red carpet of state aid”, protested this elected representative of the first political party in the country. His party is calling for tougher rules on too-big-to-fail establishments and calling for unwarranted bonuses to be refunded.
On the left, the elected socialist Carlo Sommaruga castigated the “ridiculous” price paid by UBS for the acquisition of Credit Suisse, indignant at “the privatization of profits and the nationalization of losses” at the expense of taxpayers.
UBS is to buy Credit Suisse, one of thirty banks in the world considered too big to fail, for just 3 billion Swiss francs (an equivalent sum in euros) with strong guarantees.
These reach 109 billion francs between the liquidity granted by the Swiss central bank and the guarantees of the Confederation.
At the end of the day, the elected members of the upper house voted in favor of the guarantees, but with bad grace following three days of parliamentary session. They are all the more indignant since the state had already had to come to the rescue of UBS in 2008.
This vote plunged the lower house of Parliament into a heated debate that lasted for hours. After an unlikely alliance between the left-wing parties and the Democratic Union of the center, the chamber voted, around midnight, once morest these guarantees, by 102 votes once morest 71.
But this result, which reflects the parliamentarians’ dissatisfaction with the government, remains purely symbolic. The guarantees have already been granted and cannot be blocked.
“Apparently, the financial crisis of 2008 was not enough to eliminate this type of banker embodied by Leonardo di Caprio in + The Wolf of Wall Street + and that we had seen flow with delight”, lamented the socialist parliamentarian Eva Herzog.
– Answer for their actions –
During his speech, the President of the Confederation however insisted on the fact that, “without intervention”, Credit Suisse “would have found itself, in all likelihood, in default on March 20 or 21”.
The bank was already weakened by numerous scandals, but a movement of panic took hold of the markets on March 15 in the wake of the bankruptcy of the American bank SVB.
Some parliamentarians therefore said they understood that the government might not give parliamentarians time to meet earlier.
“It’s frustrating. But when the roof burns, we bring in the firefighters, we don’t meet to find out whether to buy a fire truck,” said Damien Cottier, the leader of the Liberal-Radical Party ( liberal right), interviewed by AFP.
During the session, the elected representatives of the two chambers also debated a “possible legal action once morest the governing bodies of Credit Suisse”.
“The leaders at the origin of these shortcomings must answer for their actions”, summarized for AFP Céline Vara, elected to the upper house for the Greens.
The government has taken the lead in calming the anger by stripping Credit Suisse’s top executives of their bonuses and bonuses for 2022 and 2023.