ZURICH, April 8 (Reuters) – UBS’s (UBSG.S) multi-billion state-sponsored takeover of Credit score Suisse (CSGN.S) ought to proceed easily with out political obstructions, Swiss Finance Minister Karin Keller-Sutter mentioned in an interview printed on Saturday.
The Swiss parliament is because of maintain a unprecedented session subsequent week to debate the emergency merger engineered by the Swiss authorities after Credit score Suisse got here near collapse.
Practically 260 billion Swiss francs ($287 billion) of liquidity assist and state ensures have been supplied to again the takeover and keep away from a monetary meltdown the financial institution’s uncontrolled failure might have triggered.
“There’s a merger settlement between UBS and CS, for its half the cupboard has made a dedication to the nationwide financial institution to supply CS with liquidity with a view to guarantee stability,” Keller-Sutter advised newspaper Finanz und Wirtschaft.
“The assure settlement with UBS continues to be being negotiated. In lots of committee conferences, I bought the impression that politicians undoubtedly do not need to jeopardise the takeover,” she added.
“I do not see any obstacles in the intervening time.”
Finishing the merger was the very best precedence, the minister mentioned, who defended the federal government’s intervention final month, which critics have mentioned got here too late and promised an excessive amount of taxpayer assist for a financial institution that paid out billions in bonuses to executives.
“The first aim of the Federal Council was to make sure the soundness of the Swiss financial system and the Swiss monetary heart and to forestall a global monetary disaster,” she mentioned.
“Beneath the circumstances, it was and is the absolute best alternative, which additionally locations the least burden on the state and the taxpayer,” Keller-Sutter mentioned.
The brand new mixed financial institution could have $1.6 trillion in property – double the scale of your entire Swiss financial system – and greater than 120,000 workers and Keller-Sutter mentioned the construction of UBS must be thought of sooner or later.
“UBS should maintain extra fairness after the takeover. It will moderately pressure them to shrink,” Keller-Sutter mentioned.
Switzerland’s Competitors Fee may also make suggestions, the minister added.
The dangers to the taxpayer had been additionally acceptable – though the federal government might assume as much as 9 billion francs in losses incurred by UBS by the takeover.
Keller-Sutter criticised the tradition at Credit score Suisse, which she mentioned had set the improper incentives and had not realized from earlier scandals and prosecutions.
The minister additionally defended the writedown of AT1 bonds to zero, a controversial a part of the rescue.
“These are high-risk bonds with excessive yields, generally over 9%,” Keller-Sutter mentioned. “The prospectus for these bonds makes it clear that if an organization claims oblique authorities help, they are often written off.”
The particular parliamentary session subsequent week was essential, she added, and a welcome alternative to get to the reality of the Credit score Suisse debacle.
“In the intervening time, parliament can ‘solely’ advise on the dedication credit score, but it surely additionally has the chance to touch upon the case and play an lively position within the course of.”
($1 = 0.9051 Swiss francs)
Reporting by John Revill
Enhancing by Tomasz Janowski
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