Switzerland: Reprimand for government: No to state guarantee for Credit Suisse

The large Swiss chamber of parliament, the National Council, rejected the state guarantee given during the emergency sale of the bank Credit Suisse on Wednesday night.

Switzerland: Reprimand for government: No to state guarantee for Credit Suisse

The large Swiss chamber of parliament, the National Council, rejected the state guarantee given during the emergency sale of the bank Credit Suisse on Wednesday night. The government, the Federal Council, had pledged 109 billion francs (a good 110 billion euros) for possible defaults. The parliamentary vote has no concrete consequences because the government acted under emergency law on March 19 and the financial policy committees of both chambers of parliament had agreed. But the refusal is a reprimand for the government. Because the smaller chamber of parliament, the Council of States, had previously approved the 109 billion loan, it should go into mediation on Wednesday.

The deputies criticized the managers of the ailing bank, but also the financial supervision and the communication of the government, which presented the world with a fait accompli on a Sunday evening. She had engineered the takeover of Credit Suisse by competitor UBS for just three billion francs. Numerous members of parliament called for new rules to reduce the risks posed by private, systemically important banks for the federal budget and the economy. Parliament called on the government to consider holding senior managers accountable.

After years of risky business, Credit Suisse had lost the trust of customers and investors and had recently lost billions. Customers withdrew their funds. She threatened to become insolvent. Because the international financial markets were already nervous after the collapse of the Silicon Valley Bank and governments feared a global banking crisis, the Swiss government pushed through the takeover by UBS.

NEXT NEWS