Swiss parliament rejects emergency loans for Credit Suisse takeover
Switzerland's parliament rejected on Wednesday the government's 109 billion Swiss francs ($120.82 billion) aid for Credit Suisse's merger with UBS, leaving the fallen bank's hastily arranged rescue without a largely symbolic parliamentary blessing.
- Europe
- Anadolu Agency & Reuters
- Published Date: 10:58 | 12 April 2023
- Modified Date: 11:04 | 12 April 2023
The Swiss parliament rejected 109 billion Swiss francs ($121 billion) in financial guarantees to bail out Credit Suisse bank in an extraordinary session on Wednesday.
The parliament rejected a compromise proposal by the small chamber of the Swiss parliament by 103 votes to 71, with eight abstentions.
However, the loans have already been approved by a committee under emergency law as part of the rescue package, so a rejection only has the effect of a rebuke to the federal government.
In the parliamentary debate, the Swiss MPs criticized above all the management of Credit Suisse.
Peter Hegglin of the conservative Christian Democratic People's Party said those responsible had succumbed to greed for more profit and had ignored risks.
According to Hegglin, the bank had learned nothing from the past. "They have bankrupted a proud Credit Suisse over the years while regularly paying themselves very high salaries and bonuses," Hegglin added.
Social Democratic Party MP Eva Herzog also criticized the bank's management. "The financial crisis of 2008 was apparently not enough to make the type of banker disappear that we watched go down with relish with Leonardo DiCaprio in (the Hollywood movie) The Wolf of Wall Street," Hegglin said. The Swiss parliamentarians mainly wanted stronger regulation of big banks.
Credit Suisse has recently suffered from a considerable loss of investor confidence. The share price fell to a record low after the bank's largest investor ruled out providing further capital and the institution continued to struggle with cash outflows.
Then in March, it was announced that UBS was to take over troubled Credit Suisse for 3 billion Swiss francs ($3.34 billion). UBS Group AG is a major Swiss bank and one of the largest financial institutions in the world.
The takeover is the most significant bank merger in Europe since the financial crisis 15 years ago. The Swiss federal government facilitated the bank merger with a decree of emergency law.