Credit Suisse ‘wouldn’t have lasted another day’, Switzerland finance minister says
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Loading... - Nicole Davis
- 28 Mar 2023
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The Swiss government was forced to intervene to save the troubled bank amid a crisis of investor confidence, Finance Minister Karin Keller-Sutter said
The Swiss government was forced to intervene to save Credit Suisse Group AG as the troubled bank wouldn’t have survived another day of trading amid a crisis of investor confidence, Finance Minister Karin Keller-Sutter said.
“CS would not have survived Monday,” Keller-Sutter said in an interview with Zurich newspaper NZZ. “Without a solution, payment transactions with CS in Switzerland would have been significantly disrupted, possibly even collapsed.”
The impact of a disorderly bankruptcy may have been as much as double Swiss economic output, the minister said, citing expert estimates. More broadly, “we should have expected a global financial crisis” as “the crash of CS would have sent other banks into the abyss.”
The government-brokered purchase of Credit Suisse by UBS Group AG last weekend has been widely criticised for running roughshod over investors’ rights as well as saddling Swiss taxpayers with a huge burden in the event of another crisis. But Keller-Sutter said the alternatives were worse.
“All other options were more risky for the state,” she told NZZ. A temporary nationalisation of Credit Suisse may have lasted far longer than the government wanted as “experience also shows that it can take years or even decades before the state can withdraw from ownership of a bank.”
An orderly wind down was also ruled out, because not only would the damage have been “considerable,” but “Switzerland would have been the first country to wind down a globally systemically important bank. It was clearly not the moment for experiments.” Read More…
