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Federal Councillor Karin Keller-Sutter stated that the outcome of negotiations between Switzerland and the EU is now "significantly better," emphasizing the importance of stabilizing the EU as a key trading partner. She also addressed the PUK report on Credit Suisse, asserting that her department effectively prevented a financial crisis, despite acknowledging that the transition from her predecessor was "not ideal."
UBS played a pivotal role in the controversial write-off of $17 billion in Credit Suisse's AT1 bonds during its takeover negotiations, a move that significantly benefited UBS financially. Despite claims of ignorance from UBS Chairman Colm Kelleher, investigations reveal that UBS initiated the discussion on the bond wipe-out, which was crucial for the merger's success. This decision has led to global lawsuits from investors and potential financial repercussions for Swiss taxpayers.
UBS's recent discussions revealed a pivotal strategy involving the write-off of $17 billion in Credit Suisse's AT1 bonds, a move that significantly influenced the merger's terms. This decision, initially kept secret, allowed UBS to secure extraordinary profits, contributing nearly $30 billion in 2023. The PUK report highlights that UBS's demands were crucial for the takeover's success, overshadowing the purchase price negotiations.
National Bank Chairman Martin Schlegel advocated for the nationalization of Credit Suisse, opposing the takeover by UBS favored by then National Bank Chairman Thomas Jordan and Finance Minister Karin Keller-Sutter. This disagreement was revealed by the Parliamentary Commission of Inquiry.
The Parliamentary Commission of Inquiry revealed a split within the Swiss National Bank (SNB) regarding the Credit Suisse (CS) crisis. While then-Chairman Thomas Jordan and Finance Minister Karin Keller-Sutter favored a UBS takeover, SNB Vice President Martin Schlegel advocated for nationalization, believing it would better ensure financial stability. Additionally, FINMA President Marlene Amstad preferred a restructuring of CS that would keep it under private ownership, but the UBS acquisition ultimately proceeded at a bargain price.
The Parliamentary Commission of Inquiry into the Credit Suisse crisis concluded that the situation was self-inflicted, while acknowledging that a global financial crisis was averted in 2023. Finance Minister Karin Keller-Sutter supports the PUK's recommendations for improved banking regulation but rejects calls to restrict capital and liquidity requirements. Political parties are divided on how to address the supervisory authority Finma, with some advocating for its strengthening and others calling for accountability for its past actions.
Finma has welcomed the ICC's recommendation for enhanced regulatory responsibilities, acknowledging past criticisms and emphasizing the need for "smart" regulation following the Credit Suisse crisis. The Swiss National Bank and the Swiss Bankers Association also stress the importance of targeted regulatory adjustments to maintain competitiveness. Meanwhile, political parties call for stronger oversight and effective implementation of the ICC's recommendations to prevent future financial instability.
The Federal Council has expressed disagreement with several recommendations from the Parliamentary Investigation Commission (PUK) regarding the Credit Suisse crisis, asserting that existing too-big-to-fail rules have sufficiently strengthened systemic banks. While it supports adapting these rules to UBS's size, it rejects calls to restrict capital and liquidity easing for systemically important banks. The Council also criticized the PUK's report for containing controversial descriptions and not adequately incorporating feedback from the Federal Council.
The Parliamentary Commission of Inquiry (CEP) concluded that the collapse of Credit Suisse was primarily due to the bank's management failures, including a lack of cooperation with regulatory authorities and poor risk management. Despite significant profits, the board's reluctance to heed warnings from the Swiss Financial Market Supervisory Authority (Finma) contributed to the erosion of investor confidence. The CEP also criticized Finma for granting regulatory relief that masked the bank's true capital situation, suggesting that systemic banks should no longer receive such leniency.
A parliamentary commission of inquiry has found that Swiss authorities made significant errors leading to the collapse of Credit Suisse, attributing the loss of trust primarily to the bank's Board of Directors and Executive Board. The investigation revealed that the Financial Market Supervisory Authority (Finma) granted excessive capital relief and failed to act decisively, while the government was criticized for its lack of transparency. In response, the Swiss government plans to reform banking regulations, including stricter capital requirements, and has proposed 30 recommendations to prevent future crises.
Karin Keller-Sutter
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Keller-Sutter praises improved EU negotiations and addresses Credit Suisse report findings
13:31 21.12.2024
ubs orchestrates at1 bond wipeout in credit suisse takeover strategy
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ubs orchestrates at1 bond wipeout to secure cs takeover and massive profits
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parliamentary inquiry finds credit suisse crisis was self inflicted and preventable
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18:15 20.12.2024
Swiss authorities criticized for failures leading to Credit Suisse collapse
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17:19 20.12.2024
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