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☆ The Swiss government has put a stop to some Credit Suisse banker bonuses after public backlash over the state-engineered rescue plan
▼ + stars: | 2023-03-22 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Switzerland is halting some Credit Suisse banker bonuses. It's a U-turn from before when CS had told staff they would still receive bonuses — even for 2023. The Swiss federal finance ministry said in a statement on Tuesday that it's "temporarily suspending certain forms of variable remuneration for Credit Suisse employees. The Swiss government has been careful about its messaging about the rescue of Credit Suisse, which involves an around $3.25 billion acquisition by UBS, a larger lender. Credit Suisse did not immediately respond to Insider's request for comment sent outside regular business hours.

[1/2] The logo of the Swiss bank Credit Suisse is seen in Zurich, Switzerland March 20, 2023. While the nation's central bank and financial regulator publicly declared that Credit Suisse was sound, behind closed doors the race was on to rescue the nation's second-biggest bank. The Swiss National Bank declined to comment while the finance ministry did not respond to a request for comment. Battered by years of scandals and losses, Credit Suisse for months had been battling a crisis of confidence of its own making. By Wednesday, two days later, Credit Suisse was swept up in a full-blown crisis.

☆ Switzerland puts up 260 billion francs for Credit Suisse rescue, documents show
▼ + stars: | 2023-03-20 | by ( John Revill | ) www.reuters.com time to read: +3 min

The total of 259 billion francs of support is equivalent to a third of Switzerland's entire economic output, which stood at 771 billion francs last year. Credit Suisse said last Wednesday it would take 50 billion francs from the scheme, which provides funding secured against collateral such as mortgages and securities. On top of this, the Swiss National Bank offered the combined bank an emergency liquidity loan of up to 100 billion Swiss francs. UBS and Credit Suisse were both in a group of the 30 global systemically important banks watched closely by regulators. A failure by Credit Suisse failure would ripple throughout the entire financial system, the Swiss government said late on Sunday.

It will change the landscape of banking in Switzerland, where branches of Credit Suisse and UBS are dotted everywhere, sometimes just metres apart. The Credit Suisse rescue, orchestrated with public money, shows banks' continued vulnerability and how their problems can quickly rebound on their home country. But it also removes a competitor to Wall Street, with UBS planning to pare back much of Credit Suisse’s investment bank. During the great financial crash, it was UBS and not Credit Suisse that needed state support. UBS earned $7.6 billion in profit in 2022, while Credit Suisse lost $7.9 billion.

☆ UBS acquiring Credit Suisse is 'no bailout' says Swiss finance minister — but top economist Mohamed El-Erian disagrees
▼ + stars: | 2023-03-20 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Switzerland's finance minister said UBS' $3.25 billion acquisition of Credit Suisse is not a bailout. The UBS and Credit Suisse deal — worth 3 billion Swiss francs, or $3.25 billion — comes with government guarantees and liquidity provisions. In particular, the Swiss government is guaranteeing UBS will get up to 9 billion Swiss francs if they incur losses from certain assets. The Swiss National Bank is also providing 100 billion Swiss francs in liquidity support to both banks. "The bankruptcy of Credit Suisse would have had a huge collateral damage - on the Swiss financial market also internationally," she said.

☆ UBS's Credit Suisse deal was the best solution says Swiss gov't
▼ + stars: | 2023-03-19 | by ( ) www.reuters.com time to read: +2 min

Keller-Sutter, who said she held a Credit Suisse bank account, said the worst case had been avoided. This is a commercial solution because UBS is taking over Credit Suisse," she told a press conference in Bern. "The bankruptcy of Credit Suisse would have had a huge collateral damage - on the Swiss financial market also internationally," she said. He said it was far too early to discuss job cuts at Credit Suisse, but he was very positive about Credit Suisse's Swiss business. His upbeat tone contrasted with Credit Suisse Chairman Axel Lehmann, who was emotional when he spoke about the demise of 167-year-old Credit Suisse as an independent bank.

The terms of the deal will see Credit Suisse shareholders receive 1 UBS share for every 22.48 Credit Suisse shares they hold. "This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue. The Swiss National Bank pledged a loan of up to 100 billion Swiss francs ($108 billion) to support the takeover. UBS initially offered to buy Credit Suisse for around $1 billion Sunday, according to multiple media reports. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further "substantial" loss in 2023.

The Swiss cabinet held an emergency meeting about the central bank's move on Thursday but gave no public statement after, with most politicians, including Finance Minister Karin Keller-Sutter, tight-lipped. Greens lawmaker Gerhard Andrey said managers should take responsibility and Switzerland should look at its regulations, with the Credit Suisse debacle putting the country "in a very difficult situation". That Credit Suisse has problems has been known for a long time," said Martin Staub speaking in central Zurich. The financial sector makes up about 9% of Swiss gross domestic product, according to Finance Swiss, and employs 5.5% of the workforce. "The Credit Suisse crisis is negative for Switzerland, but not enough to damage the reputation of Switzerland on its own.

☆ Swiss minister: economic situation means difficult years ahead
▼ + stars: | 2022-11-05 | by ( ) www.reuters.com time to read: +1 min

ZURICH, Nov 5 (Reuters) - The threat of recession in the euro zone and beyond, an energy supply squeeze and the eroding effect of inflation on purchasing power mean Switzerland faces difficult years ahead, Justice Minister Karin Keller-Sutter told the Neue Zuercher Zeitung. "I consider this mixed situation to be very difficult," she said in comments published on Saturday. In September, the Swiss government significantly cut its economic growth forecasts, citing growing risks from a "tense energy situation and sharp price increases". It now expects the country's economy to expand 2.0% this year, down from its June forecast for 2.6% growth. Writing by Paul Carrel; Editing by Christina FincherOur Standards: The Thomson Reuters Trust Principles.

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