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The National Council and the Council of States discussed the Credit Suisse issue loudly in special session. Almost no one talked about the biggest risk of the bailout plan for the federal government hastily prepared: 16 billion Swiss francs worth of bonds that were declared worthless. As the “SonntagsZeitung” writes, it is becoming obvious that the federal government will have to pay some of these billions. The market value of the bonds on March 17 is used as an indicator. And that was about 8 billion Swiss francs.
On Sunday, March 19, the Federal Council decided to cancel Credit Suisse’s debts unchanged, thereby effectively confiscating their owners. However: In the case of expropriation, the federal government must pay compensation. This is also secured against foreign creditors by investment protection agreements. Switzerland has signed such agreements with more than 100 countries.
Fire hazard for Switzerland
As law professor and creditor representative Thomas Werlen confirms, the injured parties want to base their cases on these settlements. From the Swiss point of view, this is extremely dangerous. Rationale: In such disputes, bilateral arbitration courts with foreign judges come into play. The expropriation received harsh criticism abroad. The Bank of England and the European Central Bank have long distanced themselves from Switzerland’s actions.
The first cases have already been opened. The finance department confirmed to the “SonntagsZeitung” that the federal government has already been sued twice. More are likely to follow. “The federal government has taken appropriate preparedness measures,” he says. But that’s not all: in addition to civil cases, there are also criminal charges for the acquisition of CS, as the Zurich prosecutor’s office confirms. (be)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
