BERN, Switzerland: Swiss President Alain Berset on Tuesday (Apr 11) will defend the orchestrated takeover of Credit Suisse by UBS at an extraordinary session of parliament to debate the bank’s collapse.
Berset’s government played a leading role in arranging the merger of Switzerland’s biggest banks – a deal done in double-quick time behind closed doors on Mar 19.
The three-day session at the Federal Assembly in Bern was called after lawmakers found themselves before a fait accompli.
The takeover dramatically changes the financial landscape in the wealthy Alpine country, which stakes much of its national prestige on sound banking.
The merger triggered unease among the public and lawmakers alike, with the country’s second-largest bank rapidly imploding after 167 years in which it helped finance Switzerland’s industrial growth.
The extraordinary session opens at 11.15 am on Tuesday (5.15pm, Singapore Time) with a statement from the government to the 46-member Council of States upper house.
The debate then shifts to the 200-seat National Council lower chamber from 5.15 pm (11.15pm, Singapore Time).
Berset will take the floor on Tuesday, a parliament spokeswoman told AFP.
US$120 BILLION IN PLAY
Amid fears of contagion following the collapse of three US regional banks, Credit Suisse’s share price plunged, despite reassurances from the central Swiss National Bank (SNB).
But that failed to restore investor confidence, and the government, the SNB and the FINMA financial regulators, fearing a bloodbath when the markets reopened on Mar 20, strongarmed UBS into a US$3.25 billion takeover on Mar 19.
“The alternative would have been a bankruptcy of Credit Suisse … accompanied by a probable collapse of the Swiss economy,” Finance Minister Karin Keller-Sutter told Saturday’s Le Temps newspaper.
Some 109 billion Swiss francs (US$120 billion) have been put on the table between government guarantees and the liquidity the SNB made available.
In the heat of the moment, parliament’s finance delegation had to authorise the credit release without lawmakers having a chance to debate and scrutinise the arrangements.
The National Council 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”.
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