Thursday, June 1, 2023

Switzerland assures that the Credit Suisse and UBS merger is a fact, despite parliamentary rejection

He Swiss government has defended the validity of the public guarantees offered as part of the emergency agreement reached on March 19 for the rescue of Credit Suisse through its merger with UBS, despite the parliamentary rejection of the measures deployed.

“Parliament debated these credits on the premise that a rejection would have no legal effect on the Confederation’s emergency commitments to the SNB and the UBS“, the Swiss Government has pointed out, noting that “the Federal Council shares this legal opinion”.

In this sense, the Executive The Swiss country considers that without these commitments, the acquisition of Credit Suisse by UBS and, therefore, the stabilization of the financial system would not have been possible.

In the extraordinary sessions held on April 11 and 12, the council of states, the upper house of the Federal Assembly, approved the decrees; while the National Council, the lower house, twice rejected them in a general vote, meaning the matter was formally returned to the Federal Council.

Thus, at its meeting this Wednesday, the Federal Council took note of Parliament’s decision, but confirms that “this decision has no legal effect” on the commitments already assumed by the Confederation vis-à-vis third parties, that is, the SNB and UBS, because both commitments were already binding when the emergency ordinance was issued.

If the non-approval of the credits by Parliament would result in the Confederation totally or partially reversing the commitments already assumed, the ability of the Federal Council to act in times of crisis would be significantly affected, contrary to the will of Parliament expressed in the partial revision of the procedure in 2010 , has defended the Government.

“In the present case, the objective of stabilizing the Finance system. This applies to both the SNB guarantee and the UBS federal guarantee.

On March 19, the Swiss authorities, together with the country’s central bank, orchestrated the rescue of Credit Suisse, the second largest Swiss bank, through its acquisition by its rival UBS in an operation valued at around 3,000 million francs (3,051 million euros). in which the Swiss government guarantees 100 billion francs in bank liquidity and will assume up to 9 billion francs in possible losses.


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