What the Swiss media are saying about the CS takeover
The big bank UBS has taken over its hard-hit competitor Credit Suisse. What do the Swiss media have to say about it?
Since Sunday evening, the end of Credit Suisse has been sealed: The takeover of Switzerland's second-largest bank came about under pressure from politicians and regulators after CS's situation deteriorated drastically.
The transaction was preceded by marathon negotiations lasting all weekend, involving representatives of the two banks as well as federal councillors, the Swiss National Bank and the Financial Market Authority. This is what the Swiss media have to say about it:
Tamedia: "This takeover is a historic scandal."
For Tamedia, the takeover of Credit Suisse by the big bank UBS is a "historic scandal. The Confederation, Finma and the National Bank had allowed themselves to be taken to the cleaners by UBS. The new mega-bank has the advantages. Taxpayers, customers and employees the disadvantages. The largest Swiss bank is snatching up the 166-year-old Swiss institution Credit Suisse for a purchase price of three billion francs, not even half of Credit Suisse's already low stock market value. The federal government's measures burdened taxpayers with a risk of 9 billion francs. Switzerland's image as a stable financial center has been permanently damaged by the demise of Credit Suisse.
NZZ: "A zombie is gone, but a monster is born".
No one would have thought the failure of Credit Suisse possible just months ago, comments the New Zurich Newspaper. However, this was not an accident. In 2007, the Swiss bank had a stock market value of 100 billion francs, and last Friday 7 billion of that was still left - the same amount as the Vaud Cantonal Bank. Thus, a huge destruction of value had taken place, caused by managers who had negligently underestimated risks and helpless board members who had too often failed to control the bank. The fact that the National Bank and the financial supervisory authority pushed for the takeover of Credit Suisse by UBS had to do with the fear of a Monday stock market panic and pressure from Washington and London, he said. "Switzerland has now gotten rid of a zombie bank, but will wake up on Monday with a monster UBS bank," writes the NZZ.
View: "Financial plan with a colossus".
The Credit Suisse case is also a case of the Swiss financial center, comments the View. Switzerland had been asleep and had watched for far too long as the once proud Escher Bank slid into ruin with its eyes wide open. But "why didn't the authorities intervene sooner when it became increasingly clear that the bank's restructuring plan would not work? And "why were there no alarm signals from other Swiss banks?" "Why did it take pressure from foreign regulators and finance ministries" for the Swiss to carve out a stopgap solution overnight? These are questions that, according to the Viewmust be answered urgently. Because only losers were left behind.
Aargauer newspaper: "Solution catastrophic"
In the end, there was no other choice, comments the Aargauer newspaper. A solution had to be found by Sunday evening - even before the first stock exchanges in Asia opened. Otherwise Credit Suisse would have collapsed on Monday, the Swiss financial system would have been shaken - and with it the global financial system. It could have triggered a conflagration, an international banking crisis. No one in Switzerland wanted to take that risk. "No good solutions can be found under such tremendous pressure, and what was communicated in Bern last night is not just bad, it is catastrophic," the newspaper writes. Credit Suisse is being sacrificed, it says, for greater goals, for the stability of the financial system. UBS is taking over CS at a bargain price of 3 billion francs, and is having the assumed risks compensated by the federal government with a guarantee of 9 billion francs.
Südostschweiz: "Tragic end to a tragedy".
The commentary of the Südostschweiz describes the end of Credit Suisse as tragic and sad. It is tragic, he says, because the bank was actually well positioned in terms of capital and the board of directors and top management had an idea of how CS could get back on a stable footing in two or three years. However, the uncertainties triggered by bank failures in the US, which were later fueled by highly inept statements by CS's major Saudi shareholder Saudi National Bank, had snatched this opportunity away from Credit Suisse. But it would be too easy to blame external circumstances for its collapse. Rather, the end of CS is also the end of a years-long tragedy of management failures and scandals that brought the bank into this predicament in the first place, from which it was unable to extricate itself on its own.
La Liberté: "The unthinkable has happened".
The unthinkable has happened and in a flash, comments the newspaper La Liberté the takeover of CS by the big bank UBS . Credit Suisse had become the victim of a spectacular crisis of confidence last week. The Federal Council had no choice in its measures. The newspaper asks above all about the fate of the employees. Whatever the managers said, the result will be "painful" for them. There will also be a bitter taste for taxpayers, as the Swiss National Bank will have to advance up to 200 billion francs, the newspaper says. (SDA/swi)