“Switzerland did the right thing”

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Axel Weber was Chairman of UBS’s Board from 2012 to 2022 – his tenure nearly coinciding with that of CEO Sergio Ermotti. Two bank executives have brought the largest Swiss bank back into calmer waters after the state bailout of UBS during the financial crisis.

Axel Weber, former head of Deutsche Bundesbank, has yet to comment on the forced takeover of Credit Suisse by UBS out of loyalty to his former employer, as Weber said in a speech at the Corporate Money Congress in Frankfurt on Tuesday.

Still, Weber made a few comments on the Credit Suisse deal at the end of his speech. “The solution is the cheapest for Switzerland and taxpayers,” Weber said. In this regard, Switzerland has certainly done the right thing. “It was the right solution for the banks involved and also for Switzerland.”

According to Weber, the announcement from Switzerland, which is now being noticed with great attention in the international arena, was this: In such cases, a bank’s processing does not work. The Credit Suisse investment bank, which, according to Weber, was “too complicated” would have to be walled up to painstakingly launch its parts later, if there was a solution. An attempt with uncertain outcome, let Weber see it.

However, the bank is now properly subordinated to a capable competitor, as Credit Suisse has, which also brings management capabilities to tackle a “complex ledger”. Ten years ago, UBS couldn’t play this constructive role, it “can play today”. The solution, Weber says, was “ultimately a restructuring with the help of a local competitor.”

Credit Suisse’s problems came as no surprise

“Credit Suisse’s problems were no surprise,” Weber continued, and it wasn’t a shock, either. UBS kept an eye on the situation. “We’ve thought over and over in recent years, in our strategic meetings, what we’re going to do if problems arise here,” Weber said. Everyone involved had long been ready to intervene if necessary. “So there was a quick fix.”

Weber’s statement in an interview in November 2022 shows that the takeover of Credit Suisse by UBS after the bank’s downward spiral of the past two years was reluctant. There is no limit and no clear understanding of Credit Suisse’s downside risks.”

Credit Suisse’s problems came as no surprise

However, there have been rumors for years that Weber-run UBS has been flirting with the takeover of Credit Suisse. Sergio Ermotti has also consistently supported a bank consolidation. At the beginning of 2020, Axel Weber is said to be exploring the possibilities of a merger with Credit Suisse with the Ministry of Finance and Finma.

Weber’s ideas were supported by Urs Rohner, then Head of CS-VR. Current UBS Chairman of the Board Colm Kelleher and former CEO Ralph Hamers vouched for the negative comments regarding the takeover of Credit Suisse. Now there is “Monsterbank” – under different conditions.

Source :Blick