The liquidation of the Credit Suisse bank would have caused “considerable” economic damage, said Swiss Finance Minister Karin Keller-Sutter in an interview published on Saturday by the daily Neue Zürcher Zeitung.
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,” says 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 “BNS” 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 ‘too big to fail’ emergency plan would probably have triggered an international financial crisis,” said the minister.
APS