Banks
After CS takeover: UBS repays all liquidity aid to the federal and national banks
Almost half a year after the takeover of the competitor Credit Suisse, UBS is surprisingly already repaying all the liquidity aid from the federal government and the National Bank.
UBS President Colm Kelleher and Finance Minister Karin Keller-Sutter announce the takeover of Credit Suisse on March 19 in Bern.
Reuters
After 143 days it’s over. For so long, UBS has used security guarantees from the federal government and the Swiss National Bank (SNB) with a total value of CHF 259 billion to get the takeover of the competitor dry. But now the largest bank in Switzerland is waiving all guarantees and is back on its own two feet, as UBS surprisingly announced on Friday.
In a statement sent at the same time, the Swiss National Bank “welcomes” UBS’s decision to voluntarily and fully repay the SNB’s liquidity support of up to CHF 100 billion as of yesterday, Thursday, or to terminate the associated agreement. According to the SNB, this step was also taken in consultation with the Federal Department of Finance (FDF).
According to the National Bank, their liquidity support peaked at “a maximum of CHF 168 billion”. This allowed both banks to have the necessary liquidity even after the takeover.
That’s how much the federal government “earned” with the CS takeover
For its part, the FDF announced at the same time that UBS had also terminated the contract with the federal government on the federal government’s loss assumption guarantee for a further CHF 9 billion or had already repaid the funds used. As the Finance Department writes, the federal government generated income of around CHF 200 million from the guarantees granted to the big bank.
For its part, the federal government granted the SNB a 100 billion loan as part of the UBS-CS deal, which is why UBS benefited from guarantees and collateral from the federal government and the national bank totaling 259 billion. As the FDF writes, the Confederation did not have to “assume any losses” from the guarantee relationship with the SNB or UBS.
Good for taxpayers, emergency law falls away
According to the FDF, “necessarily created measures to safeguard financial stability” are no longer applicable. And the federal government continues to write, for him as well as for the taxpayers “no longer bear any risks from these guarantees,” according to the federal government.
As the FDF goes on to write, the decision by UBS and the termination of all contracts means that the emergency law used to save banks is also rendered irrelevant.
Finance Minister Karin Keller-Sutter also announced that she would like to comment on UBS’s decision this morning.
update follows…