‘Credit Suisse Can’t Last a Day’
The Swiss government really had no choice but to take over Credit Suisse Group AG because the bank could not have survived another day. This was said by Swiss Finance Minister Karin-Keller Sutter, 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 had indeed collapsed, the economic impact would have been twice that of the entire Swiss economy. “If Credit Suisse had collapsed, we could have considered a new global financial crisis because the collapse would have dragged down other banks.”
UBS’s planned takeover of Credit Suisse by the Swiss government last week was widely criticized for failing to consider investor rights and leaving Swiss taxpayers at even greater risk in the event of another crisis. According to Minister Keller-Sutter, the alternatives are even more dangerous: ‘The temporary nationalization of Credit Suisse may have taken longer than the government would have liked, as experience has shown that it can take decades for a government to divest itself of interest in a bank. Can.’
According to Keller-Sutter, the acquisition was not a government bailout because the bank did not receive money from government funds. However, he conceded that deposit guarantees were comparable to an insurance policy and therefore implied government support.
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The minister also dismissed rumors that the US is pressuring Switzerland to bail out Credit Suisse. “It’s not like Janet Yellen (U.S. Treasury Secretary, Ed.) is on the phone telling us to get UBS to buy Credit Suisse.”
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