ZURICH, March 31 (Reuters) – A ballot of Swiss economists discovered that almost half suppose the takeover of Credit score Suisse (CSGN.S) by UBS (UBSG.S) was not one of the best resolution, warning the saga has dented Switzerland’s popularity as a banking centre.
Switzerland’s KOF financial analysis institute discovered that 48% of the 167 college economists it questioned would have most popular a state takeover and potential later sale of Credit score Suisse.
“The benefit of this different would have been that it could not have created a banking big by Swiss requirements and would have preserved the depth of competitors within the Swiss banking market,” KOF stated in an announcement on Friday.
“On the identical time, nevertheless, this state resolution would most likely have created even increased dangers for Swiss taxpayers.”
Solely 19% of the economists within the ballot, which was carried out with newspaper Neue Zuercher Zeitung, thought the UBS takeover was the best choice, though supporters stated it meant monetary markets might be stabilised rapidly and work on restructuring Credit score Suisse might begin promptly.
UBS agreed to purchase its cross-town Zurich rival Credit score Suisse for 3 billion Swiss francs ($3.3 billion) in a deal engineered by the Swiss authorities, central financial institution and market regulator to keep away from a meltdown within the nation’s monetary system.
However the pressured deal, which was additionally designed to assist safe monetary stability globally throughout a interval of turmoil, has critics involved in regards to the dimension of a brand new financial institution with $1.6 trillion in property and greater than 120,000 employees.
In Switzerland, the general public and politicians have additionally voiced considerations in regards to the degree of state assist, with almost 260 billion Swiss francs in liquidity and ensures provided by the federal government and Swiss Nationwide Financial institution.
Restructuring Credit score Suisse beneath ‘too massive to fail” guidelines was favoured by 28% of respondents. This might have meant rescuing the systemically vital Swiss enterprise of Credit score Suisse and the worldwide half restructured or wound up.
The remaining 6% of respondents favoured different choices, together with a takeover by a international financial institution, or a pledge of huge assist from the SNB to assist Credit score Suisse.
Three quarters of the economist rated the takeover as a superb deal for UBS, whereas solely 12% thought it disadvantageous.
Nonetheless, the autumn out from the disaster has dented confidence within the Swiss monetary centre, with 80% of the economists saying the nation’s worldwide popularity had suffered.
The ballot follows a survey by GFS Bern exhibiting 54% of the general public not agreeing with the takeover, with 35% supporting it.
Some 40% of the general public thought a short lived state takeover of Credit score Suisse would have been a greater resolution, the GFS Bern survey stated. However 51% thought a managed chapter of the financial institution was a worse consequence than the UBS deal.
($1 = 0.9170 Swiss francs)
Reporting by John Revill; Enhancing by Alexander Smith
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