The liquidation of Credit Suisse would cause “significant” economic damage, Swiss Finance Minister Karin Keller-Sutter said in an interview published this Saturday by the Neue Zürcher Zeitung (NZZ) newspaper.
The emergency takeover of Credit Suisse by UBS for a small fee and solid financial guarantees from the authorities is drawing sharp criticism in Switzerland.
“All other options were, in our view, more risky for the state, the taxpayer, the Swiss financial center and international markets,” says Keller-Sutter.
Keller-Sutter explains that he has come to the conclusion in recent weeks that while the liquidation of a global bank like Credit Suisse is legally possible thanks to the too-big-to-fail law, “in practice, the economic damage will be significant. “.
Moreover, he argues, “Switzerland would be the first country to liquidate a globally systemically important bank.” “Now was clearly not the time for experimentation,” he adds.
The government, the Swiss Central Bank (SNB) and Finma, the Swiss market regulator, “agreed that the reorganization or bankruptcy of CS with a spin-off in Switzerland, as envisaged in the too-big-to-fail emergency plan, likely triggered the international financial crisis.” the minister said.
According to a poll released on Friday by Swiss Public Radio and Television, a majority of Swiss (54%) disagree with Credit Suisse’s acquisition of UBS.
“I understand that many people are outraged,” the minister said. “I have to admit that it’s hard for me to accept that too.” Especially when leadership errors contributed to this situation,” but, he continues, “the decision made was the one that best protected everyone.”
In the event of nationalization, he explained, the Confederation had to take all the risks.
Keller-Sutter also says there has been no foreign pressure on Switzerland. “No one pushed us in any particular direction. But it was clear to everyone, including us, that the reorganization or liquidation of the CU would cause serious international unrest in the financial markets,” he defended.
The minister also dismissed those who accused the authorities of acting too late when Credit Suisse had been embroiled in a string of scandals for two years.
“My department, the NSS and Finma discussed emergency scenarios back in January, on the second day of my tenure as finance minister. This had to be done behind the scenes so as not to undermine the credibility of the Constitutional Court,” he said.
And “in early February, I briefed the entire Federal Council (government) on emergency scenarios,” he adds.
Author: Portuguese
Source: CM Jornal
I am Michael Melvin, an experienced news writer with a passion for uncovering stories and bringing them to the public. I have been working in the news industry for over five years now, and my work has been published on multiple websites. As an author at 24 News Reporters, I cover world section of current events stories that are both informative and captivating to read.