A giant financial square remained.

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The Credit Suisse case is also a Swiss financial center case. For Switzerland had slept and watched for too long as the eyes of the once proud Escher Bank slid openly towards its collapse. Finma and the National Bank are said to have been keeping a close eye on CS since October at the latest – when clients began withdrawing billions of dollars.

It didn’t quite work. CS President Axel Lehmann (64) was allowed to continue spreading his good news with impunity. For example, in December, the client circumvented the outflow of funds and promised that the CS share price would not fall below 2.52 francs. Most recently, he denied last week the possibility that CS could be dependent on state aid.

At least he was right about that: CS actually no longer needs government assistance, it went bankrupt. But when it became increasingly clear that the bank’s restructuring plan was not going to work – also as CS’ future earnings base was increasingly eroded by cash outflows – why didn’t the authorities intervene much sooner?

Why was there no alarm signal from all the other Swiss banks that could sense the big rival getting worse and worse? CS customers happily accepted these, but gave little thought to the financial center’s reputation.

Only losers remain

Why did Switzerland first come under pressure from the external supervisory authorities and finance ministries to finally sit down and find an immediate solution almost overnight? At least a solution that is the best of all bad solutions.

Questions that need to be answered urgently. Because almost only losers get left behind. Shareholders who barely get a crumb for their share. Customers who now have to account for less competition between banks. CS employees, many of whom will likely lose their jobs. And above all the Swiss financial center. It became a financial center overnight, with a huge bank towering over everything.

A financial center that must first explain to all its foreign customers why they should re-deposit or continue investing their money in a Swiss bank. Because with the trust that CS lost, the trust in “Swiss Banking” was also lost to a great extent.

After all, Switzerland managed to avert a global financial crisis that began in Switzerland at the last minute – hopefully anyway. From this perspective, international financial markets are the only winners when traditional Swiss bank Credit Suisse collapses.

Source :Blick