Big comparison – the dimensions are huge

class=”sc-3778e872-0 cKDKQr”>

Never again state bank bailout! 2008 everyone agrees. Yet things turned out differently: After just 15 years, the state had to lend a helping hand to the financial center again. According to Finance Minister Karin Keller-Sutter (59), the takeover of CS by UBS is not a state bailout. However, the state carries great risks. Blick compares the 2008 UBS bank bailout to the current CS emergency takeover. The dimensions are huge.

In the fall of 2008, UBS is threatened with bankruptcy. At that time, the bank was converted by the federal government and the national bank. Supported a total of 66 billion Swiss francs.

Represent the new Superbank UBS today if needed 259 billion francs ready. That’s four times more than in 2008. This means that the Gotthard Base Tunnel could be built at 21 times, or twice the federal government’s total debt. For comparison: Dealing with the corona epidemic has cost the federal government 32 billion francs so far.

In 2008, the government’s commitment bore fruit. By 2013, 66 billion shares, approximately 6 billion francs. The primary added value of the support, salvation of the economy.

Even now, with the urgent takeover of CS, there is an opportunity for the state to make a financial profit. At 100 of the 259 SNB billion, the federal government charges a 0.25 percent annual premium to UBS for supply. So that makes 250 million – or 21 million per month. The premium must be paid by UBS as long as the warranty is requested. The federal government could rally for months before CS is definitely merged with UBS. If the CS recovery is successful, the federal government will make a deal. That would be a nice side effect. The most important reason for state intervention is disgust a global financial crisis.

In the years prior to 2008, UBS speculated on worthless real estate securities in the United States. The collapse of the American bank Lehman Brothers, a month before UBS nearly collapsed, destroyed confidence in the financial sector in a matter of days. There are concerns about outflows in client funds and solvency at UBS. The federal government and the Federal Reserve rush to help the bank because it is “too big to fail.”

Government assistance was required for the immediate takeover of CS as various scandals eroded trust in CS and customers had largely withdrawn their money. The announcement by one of the main shareholders of Saudi CS that he would no longer invest a penny in the bank played a role in this.

2008 is the team at UBS Peter Kurer (DRP, 73) and Marcel Rohner (CEO, 58) at the helm. They discussed the rescue plan with Swiss authorities almost overnight. Marcel Rohner’s successor as CEO Oswald GruebelManaged the bank until 2011. From 2011 to 2020 Sergio Ermotti CEO of UBS (62). It gave the bank a radical cure by drastically reducing risk investment banking. During his tenure, he transformed UBS from an old-fashioned universal bank into the world’s largest wealth management bank. Ermotti remained at the top until 2020. The same Sergio Ermotti will become CEO of the new Superbank next Wednesday.

Recent senior executives of CS Axel Lehmann (DRP, 64) and Ulrich Corner (CEO, 60). Over the past few weeks, they’ve needed the help of the federal government and the SNB to save their hard-hit 167-year-old financial institution from bankruptcy.

After the financial crisis, politics and business agreed. Such covert government action should never happen again at UBS. The “too big to fail” rules are intended to ensure that Swiss business can be separated from systemically important banks. This includes, for example, the deposit and lending business as well as the continuing processing of payment transactions in an emergency. The rules also include higher capital adequacy requirements for banks.

Processing of the CS case is gaining momentum. The National Council office announced last Monday that it plans to set up a parliamentary commission of inquiry (PUK). The takeover of CS by UBS is also a topic in the special session after Easter. It’s also an election year: Superbank UBS will likely be a permanent issue in the second half of the year.

Source :Blick