Mark Dittli: “The leaks were used to exert pressure”

In a spectacular rescue operation, UBS takes over Credit Suisse. In an interview with personal.com, which we reproduce here in full, The Market editor-in-chief Mark Dittli talks about the role of the media, false primeurs and a Bloomberg flash as a key moment in the debacle.

This content was published on March 27, 2023
March 27, 2023
minutes

personal.com

Personal.com: Mr. Dittli, Switzerland has had a sensational weekend. As a long-time business journalist, how did you experience this time?
Mark Dittli: The last few days have really reminded me of the financial crisis in 2007 and 2008. I was a correspondent in New York at the time. The nervousness on the markets, the mood of panic – there are an incredible number of parallels to that time.

Should you have seen the CS debacle coming sooner?
Global financial markets have been under a lot of stress for weeks – especially since the Friday before last, when the Silicon Valley bank collapsed. Credit Suisse has been a weak link in the banking industry for months. So the stress on the bank comes as no surprise. It just went so fast last week.

On Sunday evening, the Federal Council and the bank leaders informed about the takeover of CS by UBS. How do you rate this media conference?
I followed the press conference at home in front of the television. My subjective impression is that this CS takeover was put together very quickly over the weekend. It is remarkable how, in a relatively nonchalant manner, some of the applicable law was brushed aside. The shareholders of the two banks have no say. The financial market supervisory authority (Finma) has also eliminated concerns about competition law. This shows what an extreme fire brigade exercise this solution is. It is also striking that the security mechanisms that have been in place since the UBS crisis 15 years ago – which should have prevented the debacle – have not taken effect.

How did you perceive the communicative appearances of the representatives?
UBS President Colm Kelleher attracted attention with a very self-confident appearance. CS Chairman Axel Lehmann, on the other hand, had a tragic role given the circumstances. I found it bizarre that he praised CEO Ulrich Körner at length but hardly said a word to the rest of the staff.

How did you keep up to date over the weekend?
With CS stock in free fall since Wednesday, it was clear that something had to happen over the weekend for this panic in the markets to stop. It wasn’t important to me to hear the latest rumors every hour. That’s why it was more of a wait for me until the result was presented on Sunday evening.

It was noticeable that the international titles such as the Financial Times (FT) or Bloomberg were closer than the Swiss media. Why is that?
The FT and Bloomberg were clearly at the forefront of the current state of the discussions. But it is also clear that the two media deliberately received the information from circles of the parties involved. These leaks, some of which were deliberate, were probably used in the last few days to put pressure on the individual parties.

When specifically did such strategic information flow over the weekend? Can you give an example?
There was a rumor that Black Rock, the world‘s largest asset manager, was preparing to take over CS. Bloomberg had this primeur, which has since been proven wrong. I suppose the headline served to increase the pressure on UBS to offer a reasonably reasonable price.

Why were the FT and Bloomberg chosen for the indiscretions?
The two media reach the international capital markets – and that is exactly what they wanted to reach with this information.

So the media were more than just observers. Could different reporting have influenced the events at the end?
That’s difficult to judge. A key moment for CS was certainly the Bloomberg news flash on Wednesday with a statement from the chairman of the Saudi National Bank, according to which his bank “certainly” would not inject any further capital into CS. This statement was greatly abbreviated and partly out of context and triggered the final panic. After that, until Friday, the bank failed to stop this panic.

According to Finma boss Marlene Amstad, social media played a large part in the problems at CS. How do you rate that?
I think that’s a weak excuse. CS management also said the bank’s problems were sparked by a social media wave in September 2022. That may have played a supporting role at certain times. But that alone doesn’t stand up as a justification. If the CS hadn’t been so weak in the landscape for a long time, a tweet wouldn’t have had such consequences.

At the weekend you also criticized the Swiss reporting in the CS case via Twitter. Some media were imprecise. Can you explain?
I posted this thread on Saturday, well before the announcement with the details of this rescue exercise. In several media, the liquidity aid decided by the National Bank on Thursday night was described as state aid and the comparison to UBS 2008 was drawn. I wanted to make it clear that this is not true. This type of liquidity support is a central bank’s job and not comparable to government support.

SRF received a lot of praise for the special broadcast on external linkSunday evening. Do you share this applause?
Unfortunately I didn’t see the shows. After the media conference, we and our team made a layout and then I worked until 4 a.m.

After days of speculation and breaking news: what’s next for media reporting?
The decline of CS is historically comparable to the Swissair grounding of 2001 or the UBS crisis of 2008. The case will keep the media busy for months. Many important decisions were made by the authorities over the weekend, for example the use of emergency law. After the breaking news cycle, the media are now entering the follow-up and processing phase. Should we have seen that earlier? How prepared were you? And above all: How was it possible that almost 15 years after the rescue of UBS, the second major Swiss bank collapsed?

How do you intend to set The Market apart from other major media or business titles?
Many media always have the idea that they have to be the fastest. They think they must have the Primeur. I think the fastest news isn’t always the best news. Experience has also shown that the current high level of interest among readers will soon wane. Especially then it is worth taking a step back. As a medium, taking the time to find out the really relevant questions.

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