CS emergency takeover: review in parliament and in court
Published: Friday, Mar 15th 2024, 11:20
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In the investigation into the CS crisis, all eyes are on the Parliamentary Commission of Inquiry (PUK). However, it will not present the results of its work until the end of the year. But the legal investigation into the emergency rescue will also continue to be a topic of discussion.
The PUK, which was set up last June with seven members each from the National Council and the Council of States, is tasked with investigating the management of the authorities in connection with the emergency merger of Credit Suisse and UBS. However, it also wants to look into the history of the merger from 2015 onwards. While it had originally intended to complete its hearings by the spring session, it has now postponed the publication of a final report until the end of 2024.
Numerous hearings
By February, the PUK had already held a total of 15 meetings and heard testimony from representatives of the authorities involved in the CS crisis, i.e. the Federal Department of Finance, the Financial Market Supervisory Authority Finma and the Swiss National Bank (SNB). According to media reports, CS representatives such as the last Chairman of the Board of Directors Axel Lehmann and CEO Ulrich Körner are also said to have already made statements to the commission.
In the aftermath of the CS crisis, the media criticized all the authorities involved, i.e. FINMA, the SNB and also the FDF and its former head Ueli Maurer. However, the cooperation between the authorities was also criticized in some cases as not being optimal. The fact that the resignation announcement by SNB Chairman Thomas Jordan at the beginning of March was immediately linked to the PUK report in several media outlets - which Jordan clearly rejected.
Report on regulation
However, the "too-big-to-fail" regulation, which was put to the test as a result of the CS crisis, will first come into focus in April. In the wake of the CS crisis, the Federal Department of Finance (FDF) held out the prospect of an overall evaluation of the regulatory framework.
Their findings are now to be presented in the Federal Council's upcoming report on systemically important banks. This is also likely to address the question of why the authorities chose the CS takeover solution and not a restructuring in accordance with TBTF rules.
Legal proceedings
The CS emergency sale is also still being dealt with in Swiss courts. The international focus is on the Federal Administrative Court in St. Gallen, where appeals have been lodged on behalf of thousands of investors against the declaration of the so-called AT1 bonds as part of the CS emergency takeover with a total value of around CHF 16 billion.
Numerous former CS shareholders who do not agree with the financial terms of the takeover have also taken legal action. They are now demanding better compensation from UBS for their CS shares before the Zurich Commercial Court. As part of the takeover ordered by the authorities, UBS compensated shareholders with treasury shares worth a total of CHF 3 billion at the time. This was less than half of the last CS stock market value immediately prior to the takeover announcement.
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