How much money has been committed? In principle, the Swiss National Bank (SNB) and the Confederation have provided funds amounting to CHF 259 billion. The amount consists of several financial policy measures:
- Even before the Federal Council announced that UBS was taking over Credit Suisse, the SNB had issued what was known as “Emergency Liquidity Assistance” (ELA) in the amount of 50 billion francs spoken.
- After agreeing on the takeover, the SNB signaled that it would support the takeover of Credit Suisse by UBS with “extensive liquidity support”. The financial policy measure is called the “Public Liquidity Backstop” (PLB) and amounts to 100 billion francs.
- CS and UBS can each draw an additional CHF 50 billion. The safety guarantees thus increase further 100 billion francs.
- If Credit Suisse’s investments from the takeover exceed a loss of 5 billion, the Confederation has a loss compensation guarantee of 9 billion francs assured.
How much money has CS already withdrawn? One can only speculate about this, says Dieter Meyer, lecturer in financial accounting at the Zurich University of Applied Sciences (ZHAW). But he also emphasizes: “I firmly assume that loans have already been obtained.” This was recently confirmed by Federal Councilor and Minister of Finance Karin Keller-Sutter.
Legend:
CS lost a lot of trust from its customers. The result: outflow of customer funds and problems with liquidity.
KEYSTONE/Martin Ruetschi
In addition, according to Meyer, the SNB’s sight deposits have recently risen sharply – a clear indication that the funds are being used. “The increase is probably due to the fact that Credit Suisse is taking advantage of the additional liquidity offered by the SNB,” agrees Karsten Junius, economist at Bankhaus J. Safra Sarasin. Those directly involved could actually provide clarity here. However, the SNB does not want to comment, nor does UBS and CS. In short: It is not possible to precisely determine the flow of money from the Confederation and SNB to UBS and CS.
What are the terms of the loans? Regardless of whether ELA or PLB: Basically, the security guarantees are loans that can be obtained at a certain interest rate if required. “The banks also have to deposit collateral with the SNB,” says Meyer. Accordingly, the sum of the ELA and PLB – i.e. CHF 250 billion – is basically unproblematic for Meyer. “After all, guaranteeing liquidity at banks is one of the core tasks of a central bank like the SNB,” explains Meyer.
The situation is different with the 9 billion loss guarantees. “Here it could well be that the federal government has to step in – and thus the taxpayer,” says Meyer.
Could the amount still increase? Basically yes. The spoken contributions are not explicitly recorded in the corresponding regulations. Theoretically, the amount could continue to increase within the validity of the regulation until next September. The NZZ also reports that the Federal Council has set the upper limit for loans could increase at any time; only the national bank would have to consult the state government beforehand.