The Federal Council has decided to cancel at least some of the bonuses for the CS squads. Peter V. Kunz, Professor of Business Law at the University of Bern, explains why the Swiss government has pushed ahead and how realistic it is to reclaim bonuses that have already been paid out.
How can the Confederation reclaim the bonuses paid out by Credit Suisse?
The federal government cannot reclaim anything itself because the bankers are not federal employees. In this respect, should there actually be a claim for reimbursement, this can only be done by CS. The idea on the part of the federal government is now that the statutory measures in the area of remuneration are observed.
What right does the federal government have to ask CS to reclaim the bonuses from their employees?
The legal situation is not quite as clear as one might think. For several years there has been a new provision in the Banking Act regarding measures in the area of remuneration. Nevertheless, the options for intervention are unclear, and the provision has never been applied. The Federal Council is now launching a kind of legal test balloon.
The federal government says here: We have this opportunity to intervene in the remuneration of a systemically important bank, we will do that. We also want to have CS clarify whether bonuses that have already been paid out have to be refunded. Against this uncertain legal background, nothing will actually happen in the next few weeks.
You mention the time frame. What are the chances that CS can actually reclaim bonuses from its employees?
The probability cannot be estimated at this time because it is up to the Finance Department to issue an order to Credit Suisse. CS and the affected bankers themselves could also defend themselves in court. Nobody likes to forego bonuses. The likelihood of claims for reimbursement being made is relatively high. But whether these will be enforced is a completely open question.
So the legal situation is anything but clear. Nevertheless, the federal government is already stepping on the gas. Why?
It’s obvious that most people get excited about bonuses. You can’t really sell that. There is political pressure. It is no coincidence that the Federal Council is coming now. In addition, the extraordinary session will take place in Bern in a few days. There will be demands.
These demands would come up in the next few days anyway.
Personally, I judge this hasty decision by the Federal Council to mean that they are trying to cushion the political discussion a little as a precaution. These demands would come up in the next few days anyway. That is why the Federal Council is now taking the scepter and bringing it from its side. But it is not something that is ordered here by emergency law, but there is a legal basis. Unfortunately, this is so unclear and uncertain that not all of the approximately 1,000 bankers affected will probably simply comply.
Tobias Bühlmann conducted the interview.