The Federal Council reprimanded Treasury Secretary Ueli Maurer

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First of all, it should be mentioned here what is sometimes forgotten in the political powder smoke of the Credit Suisse debacle: the bank’s management is responsible for the bank’s end. Regulators, government and agencies will follow much later.

And yet, if the question of how it came to this, the name of a man who today remains publicly silent and ignores questions from the media, comes up very often: Ueli Maurer (72), head of the Federal Ministry of Finance from 2016 to last December (EFD) and thus political patron of the Swiss financial center for seven years, responsible for the stability and sustainability of the Swiss banking sector.

Maurer was chairman of the SVP and a senior representative of the once-powerful Zurich wing before being elected to the state government in 2008. As a member of the Federal Council, he lived through the aftermath of the UBS state bailout, the decline of banking secrecy and the introduction of the “too big to fail” laws.

Save, save, save

But since moving from defense to finance in 2016, he’s made three other things his priority: save, save, save. Despite his status as “Mister Debt Brake”, he was denied great political triumphs – until he was able to gain nationwide respect with the SME bailout in the 2020 Covid pandemic.

The achievement will be remembered as the pinnacle of Maurer’s career – and has its origins in Zurich’s Bahnhofstrasse: the initiator of the utility was Thomas Gottstein (59), CEO of Credit Suisse at the time.

The top banker successfully presented his idea to the Federal Council, whereupon a well-oiled special line began to be built between Paradeplatz and Bernerhof, the seat of the federal city’s finance department.

Become a little CS Federal Councilman

The virus made the money house of the Zurich bourgeoisie and the farmer’s son Ueli Maurer close allies. At that time, as one observer describes it, the 100% SVP Federal Council also became a small CS Federal Council.

It was all the more annoying that the large bank continued to make negative headlines just as reliably as it did under Gottstein’s predecessor Tidjane Thiam (60): misspeculations with the American hedge fund Archegos and Greensill Bank led to billions in losses and a loss of confidence.

Until Gottstein left the bank in July 2022. Just two months later, at the end of September, Ueli Maurer did the same and announced his resignation from the Bundesrat.

Laisser faire liberalism

However, despite the scandals and alarm signals, the finance minister never seemed to have wanted tighter reins in the banking sector. While Maurer once supported the planned economy as a representative of the peasantry, as finance minister he held to laissez-faire liberalism just as resolutely.

It is an unpleasant historical coincidence that exactly one day after Maurer’s resignation on September 30, the warning sign for Credit Suisse appeared on the wall. On Oct. 1, an Australian journalist shook the markets with an ominous Twitter post: “A reliable source tells me a major international investment bank is about to.”

The consequences were a cash outflow of more than 85 billion and existential hardship for Escher Bank. If Maurer expected quiet months as a “lame duck” in the Bundesrat, he may have been disappointed.

Maurer got off badly

As the “NZZ” revealed on Friday, Maurer then met with the financial crisis steering committee, which includes the head of the FDF, the president of the financial market supervisory authority and the president of the National Bank.

During those weeks, however, the state government also held several meetings in great secrecy. Nothing was allowed to come out, any wrong signal to the outside world could have had devastating consequences for CS.

The panel met once in October for a memorable crisis meeting. The finance department asked for an explanation and possible scenarios. Following an investigation by Sunday’s Blick, Maurer came off badly: the FFD was criticized for inadequate documentation of the situation, and when examining possible action options, colleagues found room for improvement. The complaint has been registered according to well-informed sources.

Intermediate relaxation

The attacked, of course, rejected the criticism and wanted nothing to do with careless preparation. Yet there was always the suspicion that Maurer did not want to tighten the rules; After all, it was his party that had attacked Finma several times in the past, and Maurer’s feud with former Finma director Mark Branson (54) is an open secret in the Federal Palace.

The former federal councilor left relevant questions unanswered to SonntagsBlick. A spokesman for the Federal Chancellery reports that the Federal Council “had to deal with CS several times last year”, “from the end of October 2022 this was more intensively the case”. No further information can be given “because the meetings of the Federal Council are confidential”.

Fortunately for Maurer, things calmed down a few days after the said conference. On October 27, the Saudi National Bank came to the rescue with a cash injection of 1.5 billion and CS announced a total capital increase of 4 billion. From the point of view of that time, the rescue plans discussed at the federal level were no longer acute.

“Leave it alone for a year or two”

The Gulf Monarchy’s fresh money was intended as a sedative for dealers and customers, but it also apparently had a calming effect on the Federal Council. This was evident in Maurer’s last interview in office, when he told SRF about CS on Dec. 13, “You just have to leave them alone for a year or two.”

Unfortunately it turned out differently. On March 19, the state, led by Maurer’s successor Karin Keller-Sutter (59), placed the bank under the wing of UBS.

Whether Maurer’s statement in the interview should be judged naive in retrospect or whether it was intended as a targeted signal to the markets remains a mystery.

Source:Blick