“Credit Suisse can’t last a day longer”
In fact, the Swiss government had no choice but to take over Credit Suisse Group AG, because the bank could not survive another day. This is what Swiss Finance Minister Karin Keller-Sutter said, according to Bloomberg.
“Credit Suisse would not have survived Monday,” Keller-Sutter told Swiss newspaper NZZ. “Without a solution, payment transactions with Credit Suisse would have gone completely wrong.”
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Experts estimate that if the bank did indeed collapse, the economic impact would likely be twice the size of the entire Swiss economy. “We could have assumed a new global financial crisis if Credit Suisse had collapsed, because this downturn would have affected other banks with it.”
Last week’s Swiss government-orchestrated takeover of Credit Suisse by UBS has been widely criticized for failing to consider investors’ rights and putting Swiss taxpayers at greater risk should another crisis loom. According to Minister Keeler-Sutter, the alternatives were more dangerous: a temporary nationalization of Credit Suisse would probably take longer than the government would like, because experience shows that it could take decades for the government to get rid of its interest in the bank. He can.’
According to Keeler Sutter, the takeover was not a government bailout, “because there was no money flowing into the bank from government finances.” She admitted, however, that guarantees on deposits are comparable to an insurance policy, and therefore there is indirect support from the state.
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The minister also denied rumors that the United States was pressuring Switzerland to bail out Credit Suisse. “It’s not like[US Treasury editor]Janet Yellen is on the phone telling us to push UBS to buy Credit Suisse.”
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