ZURICH, April 8 (Reuters) – UBS’s (UBSG.S) multi-billion state-sponsored takeover of Credit score Suisse (CSGN.S) ought to proceed easily with out political obstructions, Swiss Finance Minister Karin Keller-Sutter stated in an interview printed on Saturday.
The Swiss parliament is because of maintain a unprecedented session subsequent week to debate the emergency merger engineered by the Swiss authorities after Credit score Suisse got here near collapse.
Practically 260 billion Swiss francs ($287 billion) of liquidity assist and state ensures have been provided to again the takeover and keep away from a monetary meltdown the financial institution’s uncontrolled failure might have triggered.
“There’s a merger settlement between UBS and CS, for its half the cupboard has made a dedication to the nationwide financial institution to supply CS with liquidity with the intention to guarantee stability,” Keller-Sutter instructed newspaper Finanz und Wirtschaft.
“The assure settlement with UBS continues to be being negotiated. In lots of committee conferences, I received the impression that politicians positively do not need to jeopardise the takeover,” she added.
“I do not see any obstacles for the time being.”
Finishing the merger was the very best precedence, the minister stated, who defended the federal government’s intervention final month, which critics have stated got here too late and promised an excessive amount of taxpayer assist for a financial institution that paid out billions in bonuses to executives.
“The first purpose of the Federal Council was to make sure the steadiness of the Swiss economic system and the Swiss monetary heart and to forestall a global monetary disaster,” she stated.
“Beneath the circumstances, it was and is the absolute best selection, which additionally locations the least burden on the state and the taxpayer,” Keller-Sutter stated.
The brand new mixed financial institution could have $1.6 trillion in property – double the scale of the whole Swiss economic system – and greater than 120,000 employees and Keller-Sutter stated the construction of UBS must be thought of sooner or later.
“UBS should maintain extra fairness after the takeover. This can relatively power them to shrink,” Keller-Sutter stated.
Switzerland’s Competitors Fee also can make suggestions, the minister added.
The dangers to the taxpayer had been additionally acceptable – regardless that the federal government might assume as much as 9 billion francs in losses incurred by UBS by the takeover.
Keller-Sutter criticised the tradition at Credit score Suisse, which she stated had set the flawed incentives and had not discovered from earlier scandals and prosecutions.
The minister additionally defended the writedown of AT1 bonds to zero, a controversial a part of the rescue.
“These are high-risk bonds with excessive yields, typically over 9%,” Keller-Sutter stated. “The prospectus for these bonds makes it clear that if an organization claims oblique authorities assist, they are often written off.”
The particular parliamentary session subsequent week was vital, she added, and a welcome alternative to get to the reality of the Credit score Suisse debacle.
“In the intervening time, parliament can ‘solely’ advise on the dedication credit score, nevertheless it additionally has the chance to touch upon the case and play an lively function within the course of.”
($1 = 0.9051 Swiss francs)
Reporting by John Revill
Enhancing by Tomasz Janowski
Our Requirements: The Thomson Reuters Belief Ideas.
