GENEVA
Swiss Finance Minister Karin Keller-Sutter said in an interview published yesterday that the Swiss economy would likely have collapsed if Credit Suisse had gone bankrupt.
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Keller-Sutter told Le Temps newspaper that the government acted in the country’s best interest by expeditiously arranging the takeover of Switzerland’s second-largest bank by its larger domestic competitor UBS.
Amid fears of a global banking crisis last month, investor confidence in Credit Suisse collapsed on March 15, and the government then orchestrated a takeover over the weekend before markets reopened on March 20.
Around 109 billion Swiss francs ($120 billion) were put on the table between government guarantees and liquidity provided by the Swiss central bank.
“Without decisive action by the authorities, the alternative would have been a bankruptcy of Credit Suisse on Monday morning, accompanied by a probable collapse of the Swiss economy,” said Keller-Sutter.
Like UBS, Credit Suisse was one of the 30 banks worldwide that were of global importance to the international banking system and therefore too big to fail.
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But it suffered a string of scandals in recent years, and after three U.S. regional banks collapsed in March, it looked like the weakest link in the chain.
Acquisition talks were hastily conducted at Keller-Sutter’s Treasury Department in Bern, and the $3.25 billion deal was announced on the evening of March 19.
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