Switzerland: Credit Suisse Emergency Takeover Investigation Committee Approaches

DThe Swiss parliament wants to study developments related to the emergency takeover of the crisis bank Credit Suisse. First, the grand chamber, the National Council, voted unanimously on Wednesday. On Thursday, the smaller house, the Council of States, wanted to deal with it. Approval pending. Credit Suisse (CS) has been reeling after scandals and massive client withdrawals last year. Worried about the global implications of such a major bank failure, the government orchestrated a takeover by competitor UBS almost overnight over a weekend in March. Investors have lost a lot of money. The deal is expected to close next week.

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The deputies sharply criticized the procedure during the extraordinary debate. They refused to accept a government guarantee for billions. However, the government had already issued a guarantee, so this was primarily a symbolic act. Among other things, the commission of inquiry should find out whether the CS bankers were taking excessive risks due to too high bonuses, whether bonuses should be limited and whether the supervisory authority for the financial market. The Commission should also suggest how a similar incident could be prevented in the future.

After the global financial crisis, about 15 years ago, laws were passed in Switzerland to limit the financial damage to taxpayers from the collapse of financial institutions. However, they were not used at all. Due to global concerns about a fire in the financial sector, the state was forced to intervene. It is necessary to restore investor confidence in the financial center, the deputies demanded. The last time a committee of inquiry was in Switzerland was almost 30 years ago. In 1995, organizational problems arose in the federal pension fund.

Source: Frantfurter Allgemeine

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