Saturday, 3 June 2023

Swiss Finance Minister defends quick takeover of Credit Suisse

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Switzerland’s finance minister defended the swift merger of the country’s two largest banks in an interview with local newspaper Neue Zurcher Zeitung on Saturday, saying the use of the emergency law was necessary to stabilize the situation.

According to “Reuters”, Karen Keeler-Sutter stated, in explaining the need to find a quick solution to the bank’s problems, “Credit Suisse would not have stayed until Monday.”

She added, “Without a solution, payment transactions with Credit Suisse in Switzerland would have been greatly disrupted, and perhaps they would have collapsed, and it would not have been possible to pay salaries and invoices.”

It should be noted that last Sunday, UBS had agreed to buy its rival Credit Suisse for shares of three billion Swiss francs ($3.23 billion), and they agreed to bear losses of up to five billion francs ($5.4 billion) in a merger. It was organized by the Swiss authorities to prevent any further market disruptions regarding global banking services.

The authorities used the emergency law to enable the two banks to quickly reach an agreement. It bypassed, for example, the shareholders, who usually have a say in such acquisitions, to a large extent, which angered some of them.

Keller-Sutter said the Federal Executive Council of the Swiss government “did what was absolutely necessary to achieve the goal of stability.”

“If we had done nothing, Credit Suisse shares would have become worthless on Monday and shareholders would have gone home empty-handed,” she added.

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