Status: 04/12/2023 05:27
Following the emergency takeover of Credit Suisse, Swiss MPs voiced harsh criticism of its leadership in a special parliamentary session. In the evening, parliamentarians initially rejected the bailout in a vote and thus set an example.
According to Swiss President Alain Berset, the management of the large Swiss bank Credit Suisse, which was rescued by the emergency law, destroyed confidence in the bank itself. Top executives have learned nothing from the financial crisis, he said at the start of a special three-day session of both chambers of parliament to mark the end of traditional banking.
Bank managers succumbed to greed for more profit and hid the risks, explained Peter Hegglin of the Die Mitte party. “They have ruined a proud CS over the years and regularly receive very high salaries and bonuses.”
Swiss President Berset accused Credit Suisse of having learned nothing from the financial crisis. Image: dpa
Parliament does not initially approve the bailout
In the evening, parliament rejected financial guarantees worth 109 billion Swiss francs to save Credit Suisse in the first round. The grand chamber subsequently disapproved of the rescue operation with 102 out of 200 votes. The small chamber had already approved the funds. Both chambers are now expected to vote again on Wednesday. However, the result is almost inconsequential because the loans have already been approved by an emergency commission as part of the rescue package. A refusal would then only have the effect of a reprimand.
Government facilitates controversial bank bailout
In mid-March, the Swiss government allowed archrival UBS to take over Credit Suisse to save the country’s second-largest bank, which was on the verge of insolvency. To this end, the government suspended several laws to provide liquidity support of up to CHF 259 billion (EUR 262.7 billion) together with the Swiss National Bank.
This included government guarantees totaling 109 billion Swiss francs (110.4 billion euros). These have now been formally approved in parliamentary session. In reality, however, they had already been done before and could no longer be undone.
required consequences
Social Democrat Eva Herzog also criticized the bank’s managers. “The financial crisis of 2008 apparently wasn’t enough to do away with the kind of bankers we gleefully watched go down with Leonardo DiCaprio in ‘The Wolf of Wall Street’.” She and other MPs called for the legal scope for liability claims and damage claims to be exhausted.
The right-wing SVP has demanded new rules so that companies can go bankrupt “without dragging Switzerland or the whole world into the abyss”. The Social Democrats have also called for new banking regulations as “too big to fail” rules designed to prevent government bailouts have failed to work. The Greens called for the introduction of sustainability criteria for state guarantees.
However, most MPs admitted that the government had to intervene to avoid catastrophic consequences for the Swiss economy and possibly another global financial crisis.
Credit Suisse has already repaid part of the SNB’s liquidity assistance loan, Finance Minister Karin Keller-Sutter said. She explained that Switzerland had to decide what kind of financial center it wanted to have in the future. Certain risks would have to be accepted if the country wanted to stay in the international competition for localization.