Mon, Apr 3rd 2023
Switzerland’s Federal Prosecutor Stefan Keller announced over the weekend that his office has begun investigating the government-backed UBS purchase of Credit Suisse (CS) for CHF3 billion.
During the shotgun merger last month, the involved parties may have breached state secrecy and industrial espionage laws by leaking sensitive information to the press, according to Keller.
“The Federal Prosecutor’s office wants to proactively fulfill its mission and responsibility to contribute to a clean Swiss financial center and has set up monitoring in order to take immediate action in any situation that falls within its field of activity,” Keller told the Financial Times.
There were “numerous aspects of events around Credit Suisse” that prompted Keller to open many “investigatory orders” into government bodies. His offer will begin interviewing federal and cantonal government officials who were connected with the hasty bank merger.
More than 75% of Swiss people are against the merger which has created a “monster bank” with more than CHF5.5 trillion in assets, according to a new poll.
A majority of Swiss polled say they would support legislation to split up the newly-formed bank. More than half also say CS senior staff members should return their bonuses and be held responsible for their actions. Last week, former CS chairman Urs Rohner said he will not be returning any of the CHF52 million he earned while working at the failed bank.
Only 19% of Swiss people polled say the takeover was the only option to rescue the failing bank without affecting the Swiss economy.
Economists tend to agree with the Swiss public, according to a survey of 167 academic economists by the Economic Research Center of the ETH (KOF). About one-quarter of the economists surveyed say they, too, would have used the same method of rescuing CS. The majority of them believe that the banks’ services with deteriorate as a result and that access to credit for the Swiss will become more difficult.
Swiss Parliament will hold a special session next week in response to the public outcry. Nearly every political party in Switzerland has criticized the merger—citing how the seven-person Federal Council used emergency powers and executed taxpayer-backed financial guarantees on the behemoth bank. Swiss politicians are calling for a formal commission of inquiry to be opened.
UBS and CS shareholders – who did not get a say in the merger – will next week meet at both banks’ annual meetings. They will finally have a chance to air their grievances.
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