Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Swiss finance minister sees no 'stumbling blocks' to UBS takeover of Credit Suisse

Swiss finance minister sees no 'stumbling blocks' to UBS takeover of Credit Suisse

UBS's (UBSG.S) multi-billion state-sponsored takeover of Credit Suisse (CSGN.S) should proceed smoothly without political obstructions, Swiss Finance Minister Karin Keller-Sutter said in an interview published on Saturday.
The Swiss parliament is due to hold an extraordinary session next week to discuss the emergency merger engineered by the Swiss authorities after Credit Suisse came close to collapse.

Nearly 260 billion Swiss francs ($287 billion) of liquidity support and state guarantees have been offered to back the takeover and avoid a financial meltdown the bank's uncontrolled failure could have triggered.

"There is a merger agreement between UBS and CS, for its part the cabinet has made a commitment to the national bank to provide CS with liquidity in order to ensure stability," Keller-Sutter told newspaper Finanz und Wirtschaft.

"The guarantee agreement with UBS is still being negotiated. In many committee meetings, I got the impression that politicians definitely don't want to jeopardise the takeover," she added.

"I don't see any stumbling blocks at the moment."

Completing the merger was the highest priority, the minister said, who defended the government's intervention last month, which critics have said came too late and promised too much taxpayer support for a bank that paid out billions in bonuses to executives.

"The primary goal of the Federal Council was to ensure the stability of the Swiss economy and the Swiss financial center and to prevent an international financial crisis," she said.

"Under the circumstances, it was and is the best possible choice, which also places the least burden on the state and the taxpayer," Keller-Sutter said.

The new combined bank will have $1.6 trillion in assets - double the size of the entire Swiss economy - and more than 120,000 staff and Keller-Sutter said the structure of UBS would have to be considered in the future.

"UBS will have to hold more equity after the takeover. This will rather force them to shrink," Keller-Sutter said.

Switzerland's Competition Commission can also make recommendations, the minister added.

The risks to the taxpayer were also acceptable - even though the government could assume up to 9 billion francs in losses incurred by UBS by the takeover.

Keller-Sutter criticised the culture at Credit Suisse, which she said had set the wrong incentives and had not learned from previous scandals and prosecutions.

The minister also defended the writedown of AT1 bonds to zero, a controversial part of the rescue.

"These are high-risk bonds with high yields, sometimes over 9%," Keller-Sutter said. "The prospectus for these bonds makes it clear that if a company claims indirect government aid, they can be written off."

The special parliamentary session next week was important, she added, and a welcome opportunity to get to the truth of the Credit Suisse debacle.

"At the moment, parliament can 'only' advise on the commitment credit, but it also has the opportunity to comment on the case and play an active role in the process."

($1 = 0.9051 Swiss francs)
Newsletter

Related Articles

0:00
0:00
Close
Here's why: Scott Presley won over swing voters in Pennsylvania with a direct and uncomplicated question.
Bill Maher Shocks Liberals and Calls the Media’s Dishonest ‘Firing Squad’ Headline a HOAX
Vice President Kamala Harris proudly introduces her heroic mother, Dr. Shyamala Gopalan Harris
Siemens Acquires Altair Engineering in $10.6 Billion Deal
Understanding the US Electoral College System
Volkswagen plans to shut at least three German plants, axe tens of thousands of jobs and slash pay by 10%
There's a reason the EU is putting huge tariffs on Chinese cars. They know you and your family want one.
Venice Extends Tourist Entry Fee Program to 2025
Vatican Synod Concludes with Support for Women in Leadership Roles
France just broke a crucial barrier for Russian deserters
Meta Enhances Scam Ad Detection with Facial Recognition
German Pizzeria Caught Selling Cocaine with Pizza
Russian Boxer Receives Lifetime Ban for Illegal Move in Boxing Debut
Biden Labels Trump a Threat to Democracy
North Dakota Woman Sentenced for Poisoning Boyfriend Over Illusory Inheritance
Russian Ambassador Claims UK's Proxy War in Ukraine
Proxy Resignation Services in Japan: A Growing Trend
NASA Study Explores Potential Microbial Life Beneath Mars' Ice
Cats: The Liquid-Like Pets
Xi Jinping Urges Troops to Prepare for Conflict Amid Taiwan Drills
Hamas Chief Yahya Sinwar Killed in Israeli Operation
Fruit Fly Gut Hormone Study Sheds Light on Human Longevity
Liam Payne's Tragic Death in Buenos Aires
Trump Criticizes Zelensky for Role in Ukraine-Russia War
Yahya Sinwar’s Death Marks Pivotal Moment in Gaza War
US Warns Israel of Potential Aid Cuts Over Gaza Assistance Delays
Meta Faces Legal Battle Over Teen Social Media Addiction
Russia's Call for a BRICS Financial System Alternative
Only A Third Of Europe's Surface Waters Are Healthy
Taiwan Records Unprecedented Chinese Military Activity Post-Drills
Israel Vows to Limit Retaliatory Strike on Iran to Military Facilities
British Influencer Dies Climbing Spain's Tallest Bridge
Four Killed in Tesla Electric Car Fire in France
Man with Weapons Arrested Near Trump Rally in California
China Conducts Military Drills Around Taiwan: A Strategic Warning
US Deploys THAAD Missile Defense System to Israel
DNA Evidence Suggests Christopher Columbus Was a Sephardic Jew
NASA Launches Europa Clipper Mission to Explore Jupiter's Moon
Tesla's Robotaxi Design Strikes Controversy
Poll Shows Trump Favored Over Harris in Handling Wars
Boeing to Reduce Workforce by 10% Amid Financial Strain
These robotic arms deliver a massage that can be customized to the user's needs
Prospect of UK Rejoining the EU Discussed by Peter Mandelson
Historic Floods Reshape Sahara Desert Landscape
Brazilian Man Arrested for Decades-long Abuse and Imprisonment of Family
EU Plans Sanctions on Iran for Missile Transfers to Russia
Nihon Hidankyo Wins Nobel Peace Prize
Donald Trump Amplifies Anti-Migrant Sentiments in Colorado Speech
Ireland Urges Israel to Cease Fire on UN Peacekeepers in Lebanon
Israel Marks Yom Kippur Under Multi-Front Conflict for First Time Since 1973
×