SWITZERLAND SHAKEN
The three-day session at the Federal Assembly in Bern kicked off with Berset insisting that a takeover was the best option.
“Without intervention, Credit Suisse would have found itself, in all likelihood, in default on Mar 20 or 21,” he told the 46-member Council of States, the upper house of parliament.
That “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,” he insisted.
“Switzerland, is shaken by this painful episode,” he said.
“CALL IN THE FIREFIGHTERS”
Amid fears of contagion following the collapse of three US regional banks, Credit Suisse was left looking vulnerable among the 30 banks deemed too big to fail.
Its share price plunged and, fearing a bloodbath when the markets reopened on Mar 20, the government, the central bank and the FINMA financial regulator strongarmed UBS into a US$3.25-billion takeover.
Damien Cottier, the parliamentary leader of the Liberals party (FDP), complained that parliament had been sidelined.
“It’s frustrating, but when the roof burns we call in the firefighters; we don’t meet to work out whether to buy a fire engine,” Cottier told AFP.
The National Council lower chamber wants to examine the guarantees granted to prop up the rescue, the possibility of legal action against Credit Suisse’s governing bodies and the regulation of banks considered “too big to fail”.
Celine Vara of the Greens told AFP: “The disastrous management of the bank sparked the loss of confidence of the markets and the public. The leaders at the heart of these failures must answer for their actions.”
The government has calmed some of the anger by stripping Credit Suisse’s executive board of their 2022 and 2023 bonuses.
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