This catastrophe should never have happened

In the end there was no other choice. A solution had to be found on Sunday evening – even before the first stock markets open in Asia. Otherwise Credit Suisse would have collapsed on Monday, the Swiss financial system would have been shaken – and with it the global financial system. A conflagration, an international banking crisis could have ensued. Nobody in Switzerland wanted to take that risk.

Credit Suisse is being sacrificed for greater goals, for the stability of the financial system. UBS acquires CS for a bargain price of CHF 3 billion and has the federal government offset the assumed risks with a CHF 9 billion guarantee. As a reminder, the book value of CS was 40 billion francs, the market value was almost 8 billion.

This is humiliating for Credit Suisse and everyone who works there, and embarrassing for its top bosses, who completely lost control last week and had nothing left to counter the bank run. However, it is not primarily their fault, but their predecessors.

Blame incompetent CEOs and board members who, over the past 10 years, have led the honorable, 167-year-old bank to the brink – the bank that financed Switzerland’s rail network and the first Gotthard rail tunnel and accounts for 40 percent of all SMBs .

UBS did not want the takeover

Is it still a good deal for UBS? That won’t be answered for years to come, but for now the answer is no. UBS did not want this acquisition, they were forced to by the National Bank, the financial market supervisory authority and foreign regulators – in the interest of Switzerland and global stability.

Can a Forced Marriage Work? She will also make sacrifices at UBS, because the thousands of jobs that will now become redundant will not only be lost at Credit Suisse, but also at UBS. At the bank that has developed very well since its own near-death experience in the financial crisis of 2008 and that, thanks to foresighted bosses, has not done stupid things with such dire consequences as CS.

Humiliating for Credit Suisse, dubious for UBS – is the takeover at least good for Switzerland? It should never have come to the point that Switzerland finds itself in such a predicament. In a situation where the Federal Council, the National Bank and the regulators have to find not the best, but the least bad solution. Even worse would have been: bankruptcy of CS, because then Switzerland’s reputation would have been damaged enormously and our country would have become the epicenter of a global financial earthquake.

A takeover by the federal government would have been worse, leaving taxpayers with billions of dollars in risk. And the acquisition of CS by a foreign bank would probably have been worse, which would hardly have listened to a socially acceptable restructuring.

A fall from grace that should never have happened after the UBS crisis in 2008. This time, those in charge of the bank – especially the former – should not get away with it. The role of the National Bank and Finma must also be reviewed. You responded too late. If no consequences are drawn now, the liberal seat of Switzerland is in acute danger. (aargauerzeitung.ch)