Big round of applause for UBS boss at SEF in Interlaken: Sergio Ermotti has screwed everyone up and isn’t getting the cat out of the bag yet

In a poll conducted in the Chamber, 61 percent of respondents said that the acquisition of CS by UBS was the best solution given the circumstances. A result that positively surprised even Ermotti.

It’s a motivational shot that Ticino can really use. He has weeks of long and hard work behind him as he looks a bit tired when he performs. And starting next Monday with the completion of the takeover, the big piece is still to come.

Mission Ermotti

“We feel responsibility,” says Ermotti. “A big moment for Switzerland and its financial centre.” Ticino feels inside, he wants to give something back to Switzerland, he has a mission to fulfill and can finally make a big deal.

However, he also knows that UBS faces a huge task: “We have a bumpy road ahead,” he says, referring to the integration and restructuring of Credit Suisse.

Ermotti remains silent about what will happen to CS’ Swiss business and how deep the cuts to staff will be, and he doesn’t get the cat out of the bag. “But restructuring is needed and I believe we can also control the staffing situation through volatility, early retirement and a balanced social plan.”

Sugar for taxpayers

The word “social plan” took some observers by surprise. Because it’s becoming increasingly clear that the CS takeover won’t happen without the loss of thousands of jobs.

So it doesn’t hurt for UBS to hand out candy and vitamins in an old VW bus outside the convention center. On Friday, a treat was given to taxpayers in Bern. Because under all circumstances it should be avoided that they have to take responsibility for the rescue of the CS.

That’s why the federal government and UBS quickly signed the loss guarantee agreement from the takeover of Credit Suisse by UBS, before “dated Monday.” This imposes stringent requirements on when the CHF 9 billion federal financial guarantee actually takes effect in the event of any loss incurred when Credit Suisse assets are sold.

40 billion francs

Until now, it was unclear how high the risk was for UBS to acquire loss-prone securities from CS. The Federal Council writes that the Credit Suisse securities portfolio “covers approximately three percent of the combined bank’s total assets.” Three percent corresponds to an investment volume of 40 billion francs, as heard from UBS.

The only thing that is clear right now is that there is only money from the federal government for the actual losses during the recovery and should the bank leave its headquarters in Switzerland.