Swiss President Alain Berset on Tuesday (April 11) defended Credit Suisse takeover by UBS saying that letting Credit Suisse fall would have triggered a catastrophe. He was addressing an extraordinary session of Swiss parliament. The session was called to debate the controversial March 19 deal that was arranged by the government quickly behind closed doors.
Letting Credit Suisse go bankrupt once the stock markets reopened on March 20 “would potentially have created an international financial crisis with devastating effects for Switzerland, for companies, for private customers but also for the reputation of our country”, the president said.
“The demise of Credit Suisse is not the demise of Switzerland. It is the loss of a bank; a large bank but only a bank. Nothing more, nothing less.”
The three-day session at the Federal Assembly in Bern was called after lawmakers found themselves before a fait accompli.
Credit Suisse takeover by UBS has dramatically changed financial landscape of Switzerland. The Alpine country stakes much of its national prestige on sound banking.
The takeover triggered unease among the public and lawmakers alike, with the country’s second-largest bank rapidly imploding after 167 years, during which it helped finance Switzerland’s industrial growth.
“Without intervention, Credit Suisse would have found itself, in all likelihood, in default on March 20 or 21,” Berset said.
Rather than bankruptcy, nationalisation or attempting to restructure a bank in which confidence was shot, the takeover was considered the most likely option to restore market confidence, the president told the 46-member Council of States, the upper house of parliament.
(With inputs from agencies)
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