2023-08-11 16:51:21
The Swiss National Bank (SNB) has decided, at the request of UBS and in consultation with the Federal Department of Finance (FDF), to end the liquidity assistance loan agreements for Credit Suisse until August 11.
The first Swiss bank announced on Friday that it no longer needed the guarantees and loans in the form of cash that the government and the SNB had made available to it during the forced takeover of Credit Suisse last March.
UBS has terminated the guarantee contract once morest losses, up to 9 billion francs, concluded with the Confederation, as well as the contract for loans in the form of liquidity of up to 100 billion francs guaranteed by the State, concluded with the SNB.
>> Read also: Confederation and UBS sign loss guarantee contract
“I’m relieved,” says Karin Keller-Sutter
“The lifting of the guarantee by UBS is beneficial for the Confederation and the taxpayers,” underlined Federal Councilor Karin Keller-Sutter. The emergency measures aimed at preserving financial stability are therefore coming to an end. The Confederation and the taxpayers no longer incur any risk related to these guarantees. The Minister of Finance recalled that these guarantees brought in revenue for the State (read framed).
“I do not hide from you that I am relieved”, highlighted the head of the DFF.
In addition, she noted that the payment of cash made available to UBS to facilitate the takeover of Credit Suisse is a “strong signal” for the financial markets. Investors indeed applauded the announcement. The UBS share took 4.9% to 20.35 francs to 10.45 francs at 10:45 a.m.
>> The details in the 12:30 p.m.: The new mega bank UBS waives all guarantees from the Confederation / Le 12h30 / 3 min. / today at 12:33
“The bankruptcy of Credit Suisse would have incalculable consequences for the Swiss economy but also on a global level”, insisted Karin Keller-Sutter, while acknowledging that it was the least bad solution.
“Credit Suisse was not saved”
An opinion that does not share Carlo Lombardini, a lawyer specializing in banking law, interviewed Friday evening in Forum. According to him, the acquisition by UBS does not constitute a rescue. “Nothing was saved,” he asserts. “The Confederation let Credit Suisse die!”
According to him, another solution would have been possible: it would have been necessary to have the courage to nationalize Credit Suisse, which the law allows, and to restore confidence thanks to the guarantee of having the Confederation as the main shareholder.
“It is very serious that the Confederation did not save a bank […] which was fundamentally sound, apart from the cells […] unhealthy that were in the investment bank.” Conversely, nationalization would have allowed “the maintenance of a good bank and the creation of a bad bank that we were going to liquidate. The shareholders should have lost everything!”
Thus, for the specialist in banking law, the operation constitutes “a magnificent success for UBS, so much the better for them! But I am impatiently awaiting the result of the commission of inquiry into this very sad affair, and I do not think that the government must be proud of tonight.” He adds, however, that the latter may have had good reasons for doing so. “This is what the Parliamentary Inquiry Commission (CEP) will help to understand, I hope!”
>> His full interview in Forum: Carlo Lombardini talks regarding UBS’s decision to waive state guarantees / Forum / 4 min. / today at 6:05 p.m.
Reflection on the regulation to be carried out
Carlo Lombardini also hopes that this CEP will allow reflection on how to supervise a bank. On this subject, Karin Keller-Sutter also declared that it was now necessary to reflect on the mechanisms that might in the future be put in place in Switzerland to give the regulatory authorities more tools to make themselves heard with the banks.
She also criticized the decisions of the leaders of Credit Suisse having led to the loss of investor confidence in the establishment, which was a flagship of the Swiss banking system.
Asked regarding the future size of UBS following the integration of the bank with two veils, Karin Keller-Sutter recalled that UBS was conducting discussions with the Federal Department of Economics and the social partners. Thousands of Credit Suisse employees are expected to see their positions cut in the merger.
>> The explanations in the 12:45: Renunciation of the guarantees of the Confederation: the analysis of Pierre Nebel, correspondent in Bern. / 12:45 p.m. / 1 min. / today at 12:45
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