PUK report on Credit Suisse: UBS supports proposals

The state will probably have to intervene in the future if a major bank falters, says Ryser. Switzerland must therefore adapt its too-big-to-fail rules. So it should better prepare itself for the next banking crisis. A compensation system is needed that does not create false incentives for big bankers. So no bonuses should be paid out despite losses.

11:09 a.m

Roger Nordmann (SP/VD) explains that the security instruments failed and that the authorities were too late.

Franziska Ryser (Greens/SG) picks up the thread and describes the acute crisis in CS. So the last days of the bank, when it was on the verge of collapse due to the small bank crisis in the USA. UBS should swallow CS, according to the authorities’ main scenario. The finance department mediated between the banks. This enabled a quick result to be achieved, says Ryser.

There were two other scenarios: a partial nationalization and a restructuring.

The PUK considers the chosen solution to be appropriate. The fact that emergency law was needed for this is okay, says Ryser.

10:58 am

Thomas Matter (SVP/ZH) explains why an exception from the financial market regulator Finma was fatal for CS. It’s about easing the equity cushion, a so-called filter. The PUK views this exemption for the CS very critically. The National Bank also criticized the filter when it was introduced in 2017. In reality, the filter turned out to be much higher than originally planned. “The filter was twice as high as originally estimated,” says Matter. The problems with CS would have become apparent sooner if the filter hadn’t existed. It should no longer be possible to grant such exceptions in the future.

10:43 am

Switzerland did not have a PLB. The abbreviation stands for Public Liquidity Backstop. This is an instrument through which a bank temporarily receives liquid assets from the state. According to Chassot, it was a mistake that Switzerland did not have this instrument available. In addition, the financial market supervisory authority reacted too hesitantly.

10:54 am

Beat Flach (GLP/AG) says that Switzerland lacks the means to identify crises early. The existing instruments were not sufficient for this. There is a lack of a mechanism to recognize a risk and avert it, says Flach.

10:50 am

Michel explains that many other countries have a public liquidity backstop. It is an instrument that can help in crises. But Switzerland missed that. Work on this should now be intensified.

10:47 am

Council of States Matthias Michel (FDP/ZG) says that the bank was struggling because of years of mismanagement by the bank bosses. He describes the decline of the bank. For example, a tweet from an Australian journalist played a big role. He ensured that many customers withdrew their money. Billions flowed out in a very short time. The crisis began, more and more money was withdrawn – until the bank could no longer exist.

10:40 am

The examination was conducted in German. This was so that she could move forward more quickly. It lasted 18 months. “There were isolated leaks during this time,” says Chassot. That’s why the PUK filed two criminal complaints. How things are going for them remains to be seen.

10:37 am

The mandate for the PUK was very broad, says Chassot. It’s about many authorities and how they worked together. The PUK interviewed over 70 people for this purpose. The list is not secret. This also includes former CS managers such as Urs Rohner and Tidjane Thiam. The entire list can be found in the report. All authorities investigated were consulted on the report twice.

10:34 am

PUK President Isabelle Chassot welcomes the audience. The hall is tightly packed. She first introduces the representatives of the 14-member commission present and then the initial situation of the report. It’s about the end of the CS in March 2023. If the state hadn’t stepped in, there would have been a financial crisis. How could it come to this? The PUK investigated whether the authorities acted correctly before and during the crisis.

The major bank UBS has taken note of the report of the Parliamentary Commission of Inquiry (PUK) into the collapse of Credit Suisse in March 2023. He confirmed that the CS collapsed due to years of poor strategic decisions, mismanagement and dependence on substantial regulatory concessions.

The major bank explained that UBS supports “most” of the Federal Council’s proposals to strengthen the resilience of the financial center. Any adjustments to the regulatory requirements would have to be “targeted, proportional and internationally coordinated”.

Financial stability and the resulting economic costs would have to be balanced. The major bank also points out that it will have to hold around $20 billion in additional capital due to the acquisition of Credit Suisse.

Ueli Maurer does not want to comment yet

The former finance minister and former Federal Councilor Ueli Maurer (SVP/ZH) is not taking a position for the time being. The 74-year-old wanted to check the report himself first. His party announced this on Friday at the request of the Keystone-SDA news agency.

The Parliamentary Commission of Inquiry (PUK) criticizes the behavior of the Finance Minister, who resigned at the end of 2022. It is incomprehensible that Maurer only informed the entire Federal Council verbally and forewent written documents, she writes.

Maurer only shared a little information with the entire Federal Council. In a newspaper interview in February 2024, the Zurich native defended his decision not to intervene with Credit Suisse. (SDA/fem)

On Friday, the Parliamentary Commission of Investigation (PUK) will present the report on the demise of Credit Suisse and the subsequent takeover by UBS. The document has been eagerly awaited by experts for weeks: it may be the last central piece of the puzzle in coming to terms with the banking debacle.

The big bank had to be taken over by its competitor UBS in 2023. It ran into difficulties from mid-2022, first because of a large outflow of customer money, then because of the rapidly falling share price. The Federal Council then brokered the takeover by UBS. The focus of the investigation is on the roles of the National Bank, the financial market supervisory authority Finma, and those of the Federal Council’s Finance Department.

In total, the PUK heard from 79 people in 45 meetings and analyzed over 30,000 pages. President Isabelle Chassot (center) and her deputy, Green National Councilor Franziska Ryser, will present the results. The remaining members of the investigative commission will also be present. The media conference begins at 10:30 a.m.