Five weeks ago, Credit Suisse was taken over by UBS with the support of the federal government. As the deal goes through, Finance Minister Karin Keller-Sutter has yet to answer critical questions about the bankruptcy.
SRF News: The National Council said no to the CS deal in the extraordinary parliamentary debate – a personal defeat for you?
Karin Keller-Sutter: No, in politics you have to learn not to take things personally, otherwise you will no longer be happy. The no was certain from the start because SP and SVP had previously announced that they would not agree. It was important for me and the Federal Council that the stability of this takeover was not jeopardized.
CS published new figures today. In the first quarter of 2023, customer deposits amounting to 61 billion francs were withdrawn. Did that shock you?
It didn’t shock me because it was self-evident. From the Wednesday in March before the takeover, when the Saudi National Bank also said it was no longer investing in CS, there was effectively a bank run. Money flowed out at a speed that cannot be imagined. That was different from the financial crisis of 2008, because today you can access money digitally, hence this acceleration.
What does that mean in numbers?
On March 19th, the day of the takeover by UBS, we knew that the Confederation and the National Bank had to provide CS with 170 billion francs in liquidity.
In this deal, you had given federal guarantees of 100 billion. So were they actually used?
Almost, yes. Apparently, up to almost 80 billion francs of funds were needed. The good news is that quite a lot has flowed back again. This shows that the partnership with UBS – a robust, well-financed and stable private company that CS took under its wing – means some stabilization. At the same time, the state and the National Bank have undertaken to provide guarantees, i.e. liquidity.
Regarding the contract with UBS, which has not yet been signed: there are political demands, such as bonus reductions or a spin-off from CS Switzerland. What do you think?
First you have to create stability. It has now been seen that although the outflow of funds at Credit Suisse has stabilized, liquidity is still being drawn. Now it’s really about completing the transaction smoothly and as quickly as possible.
There are now lawsuits from bondholders with so-called AT1 bonds. Is there now a threat of a wave of lawsuits, in which taxpayers will also be asked to pay?
Again, we had a bank run. It can’t be said often enough. Credit Suisse would likely have defaulted during March 20th. There would have been a disorderly bankruptcy of the bank, with all the economic damage.
The AT1 loans are high-risk loans that were made after the last financial crisis so that they could be used to strengthen a bank’s capital. And that’s what you’ve done now. Finma wrote off these AT1 loans. We have the impression that we are on the safe side, because the prospectus also states that these loans can be used with government support.
Reto Lipp conducted the interview.