Swiss political parties were divided on Thursday over the news that the Swiss National Bank (SNB) had agreed to lend Credit Suisse up to CHF50 billion ($54 billion) to shore up liquidity and boost investor confidence after a slump in its shares.
This content was published on March 16, 2023
Centre-right parties unanimously welcomed the $54 billion lifeline for Switzerland’s second-largest bank. But the centre-left Social Democratic Party expressed its bitterness and demanded “complete transparency” over the affair and that those responsible be held accountable.
Social Democratic Party co-president Cédric Wermuth called it a “collapse” but also a “foreseeable rescue operation” given the string of scandals, losses and management upheavals that have plagued Credit Suisse in recent years.
The party does not dispute the need for the SNB to intervene to stabilise the financial system. But it wants the matter fully investigated. “We want to know who knew what and how we got to this debacle,” said Wermuth.
The left-wing Greens are also harsh in their assessment. Fribourg parliamentarian Gerhard Andrey said the emergency lifeline was certainly in line with existing rules. But he wondered how such a collapse was possible following the lessons of the 2008 financial crisis.
The supervisory procedures obviously did not work, he said. “Stricter rules are needed to ensure that those involved at the highest level take responsibility.”
Centre-right parties, meanwhile, welcomed the SNB’s intervention.
“Credit Suisse has a confidence problem, but not a solvency problem,” said Thomas Matter of the rightwing Swiss People’s Party.
Centre-right Radical parliamentarian Daniela Schneeberger welcomed the fact that the SNB and the Swiss Financial Market Supervisory Authority (FINMA) had stepped in. She does not believe a state rescue operation, as was the case with UBS during the 2008 financial crisis, is necessary.
Martin Landolt of the Centre Party also welcomed the “extremely valuable and confidence-building” intervention of the SNB and FINMA. In principle, the crisis management mechanism for a bank classified as “too big to fail” is ready and could be triggered if necessary.
The SNB’s promise of emergency liquidity came after Credit Suisse’s largest shareholder, the Saudi National Bank, said it would not stump up any more money after injecting billions into the bank last year.
Another major shareholder, Harris Associates, had earlier said it would sell its stake in Credit Suisse.
This is not the first time that the Swiss central bank has rushed to the aid of an ailing commercial bank. In 2008, the SNB took toxic mortgage loan-related assets from UBS to keep the bank afloat during the financial crisis.
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