Swiss lawmakers blamed government, regulators and the management for failures around the takeover of Credit Suisse last month, setting the stage for an election year in which thousands of jobs are at stake.
hough the legislative doesn’t have the power to derail the takeover, the extraordinary parliamentary meeting scheduled for three days is forcing the government into continued defense of its actions during the unpopular emergency takeover by UBS Group AG announced on March 19.
More than a dozen lawmakers, including those from the small group that signed off on the transaction as part of the so-called financial delegation, voiced their grievances. Their concerns varied from being circumvented in the emergency legislation, to regulatory lapses that allowed Credit Suisse’s failings to go un-addressed, to demanding accountability for the bank’s management.
“The legal possibilities against the bankers responsible and the possibilities to claw back bonuses need to be exhausted to the fullest extent,” said Free Democrats’ Thierry Burkart, who leads the party of Finance Minister Karin Keller-Sutter.
Some legislators called for greater powers for the financial regulator, Finma, amid a broader review of too-big-to-fail rules for the sector, while others asked for a parliamentary inquiry commission. Quick legislative changes are unlikely though, as became apparent during the debate.
The deal was described by President Alain Berset at the start of the day as the best option to re-establish confidence in markets that created a banking giant whose assets are more than twice the size of the Swiss economy.
Politicians and business leaders have voiced worries that the combined lender will have excessive market power, leading to a loss of competition. Despite the risks involved in integrating Credit Suisse, UBS stands to become a banking “powerhouse” post merger, analysts at JPMorgan Chase. wrote.
UBS, already one of the world’s largest wealth managers, is now taking over a key rival for a fraction of the value of its assets and receiving as much as 9bn Swiss francs (€9bn) in government loss guarantees.
“Credit Suisse’s leadership has to take responsibility for its actions,” Hansjoerg Knecht, a member of the Swiss People’s Party, told the upper house of parliament during the special session in Bern. “Tens of thousands of employees worry for their jobs.”
Before the takeover, Credit Suisse had already planned to cut as many as 9,000 jobs over the coming years.
The overlaps between the two banks will likely lead to that number rising, though executives including UBS Chairman Colm Kelleher have said that it is too early to say how big the cuts will be.
