In the country of consensual decisions and the resulting slowness, we sometimes know how to be brutal and fast, but the situation really has to be serious.
It was so throughout the weekend in Bern, where intense negotiations took place at the Bernerhof, the Swiss finance ministry, in the presence of an unprecedented assembly of bankers and political leaders. Their only mission was to avoid the catastrophe announced for Monday morning March 20 on the international financial markets in the event of failure of the negotiations. As of Friday evening, the participants in this almost uninterrupted crisis session multiplied entries and exits from the ministry without a word for the journalists, their features becoming more and more tense.
The casting ? The seven federal councilors (ministers), i.e. the entire government; the President of the Swiss National Bank (SNB), Thomas Jordan, those of the two banks, Colm Kelleher (UBS) and Axel Lehmann (Credit Suisse), in the presence of experts from Finma, the financial market supervisory authority, and of several senior federal finance officials. At stake, nothing less than the future of the Swiss financial center, threatened by the implosion of Credit Suisse, one of the two major historical banks of the Confederation.
Still unthinkable a few weeks ago, the disappearance of one of the jewels of the Alpine country’s economic history was recorded on Sunday March 19 at 7:30 p.m. when, looking serious, the Swiss president in office, Alain Berset, announced the takeover of Credit Suisse by UBS for 3 billion francs (3 billion euros), payable in UBS shares, for a bank which was worth almost triple Friday at the close of the markets.
Usually non-interventionist because of its liberal credo, the Swiss Federal State supports the operation by granting UBS guarantees of up to 9 billion francs – they will allow the buyer, for example, to cover his foreseeable losses when he “will clean” the investment banking division inherited from Credit Suisse. For its part, the SNB has promised up to 200 billion francs if necessary to guarantee the fluidity of liquidity in the intense phase of rapprochement between the two establishments which should run until the end of 2023. Clearly, there is probably still has corpses in the cupboards of Credit Suisse, and it was without having had the time to verify it that UBS nevertheless approved the operation.
Intense external pressures suffered by Bern
This fusion, in the form of forced marriage by and for the superior interest of the nation, makes “disappear a zombie bank and give birth to a banking monster” like Switzerland had never known before, summarizes nicely, Sunday evening, the Neue Zürcher Zeitung.
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