Switzerland: the rescue of Credit Suisse brings 100 million CHF to the State

The Swiss state has earned around 100 million Swiss francs (103 million euros) thanks to the sums lent to Credit Suisse during its rescue, the finance minister said on Friday in an interview with the daily Tages-Anzeiger.

To prevent the country’s second largest bank from going bankrupt, the Confederation and the Swiss central bank have put billions of francs in cash on the table and orchestrated its emergency takeover by its competitor UBS in mid-March.

The premiums that the bank must pay to repay the borrowed cash generated “some 100 million francs” for the Confederation, declared Karine Keller-Sutter to the Tages-Anzeiger, specifying that this amount concerns only the part borrowed from the State, not the central bank.

The state had made available 9 billion Swiss francs while the central bank had allowed it to borrow up to 200 billion francs, including 100 million benefiting from a state guarantee.

A few days before the announcement of its takeover by UBS, the central bank had already launched a first lifeline to Credit Suisse during a movement of panic on the financial markets by allowing it to borrow up to 50 billion francs of cash.

Regarding the share borrowed from the state, the amount of aid in the form of cash that Credit Suisse must still repay amounts to around 5 billion francs, said the Minister of Finance.

“I think it should be fully refunded soon,” she said.

With the bankruptcy of the American bank SVB, a movement of panic had taken hold of the markets, plunging the bank Credit Suisse which was perceived as the weak link in the banking sector in Europe after a series of scandals.

Under pressure from the authorities, UBS agreed on March 19 to buy out its competitor for the sum of 3 billion francs to avoid its collapse. Voices have since been raised to strengthen legislation concerning banks considered too big to fail.

This merger of the two largest banks in the country will create a colossus at the head of 5,000 billion dollars of invested assets, which raises serious concerns for competition and employment in Switzerland as well as for the stability of the Swiss financial system. given its weight in the Swiss economy.