Credit Suisse defended by monetary authority

The Vice President of the Swiss National Bank, Martin Schlegel, said, “If the merger agreement between Credit Suisse and UBS had not been realized, Credit Suisse would have gone bankrupt.” While the historic UBS-Credit Suisse merger is the subject of a judicial investigation, the Swiss National Bank defended the agreement. The bank’s vice president, Martin Schlegel, said, “If Credit Suisse had not been sold to the UBS Group, it would have gone bankrupt the next trading day and caused a global financial crisis.” Speaking to the Swiss-based SRF television, Schlegel stated that if the government had failed to broker the deal, they would have faced a financial crisis, and that the UBS-CS agreement was “the best of bad solutions.” The UBS-CS merger was realized using the government’s emergency powers, and shareholder approval for the merger was not obtained. The general assemblies of the two banks will take place this week. The issue has also become an area of interest for the judiciary. While high-scale layoffs have been on the agenda following the historic merger of UBS and Credit Suisse, prosecutors have also begun to collect evidence as part of the investigation into the merger agreement. According to the Swiss-based SonntagsZeitung, UBS has decided to reduce its workforce by 20% to 30% after the merger. After the Credit Suisse takeover deal is completed, UBS will lay off 11,000 employees in Switzerland and 25,000 outside Switzerland. As of the end of 2022, the two banks employed a total of 125,000 employees. In a separate statement made by the Swiss Attorney General's Office on Monday, it was stated that an investigation into the takeover has been launched and that possible criminal elements are being examined. The prosecutor's office has ordered national and regional authorities to join the investigation. The banking panic that began with the flight of deposits from some regional banks in the US resulted in UBS taking over Credit Suisse in a historic deal worth $3.3 billion. The deal was made at the initiative of the Swiss government without obtaining shareholder approval.