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Swiss bankers take the iron from the European crisis



The fall of Credit Suisse (CS), the second largest bank in Switzerland and the world leader in investment and wealth management, did not cause serious consequences for the national and international financial system, according to analysts. Not even after the panic that Deutsche Bank hit European stock markets at the end of March. The crisis was slowly brewing and worsened with the announcement, last February, of historic losses of 7.3 billion Swiss francs. In the midst of an out-of-control situation, due to increasingly volatile markets and outlandish rumors, the CS directors were forced to negotiate with their rivals from the Union of Swiss Banks (UBS) and, with the support of the Swiss government, a forced marriage that would prevent a financial disaster with international consequences. Related News Norm UBS restores Ermotti as CEO after Credit Suisse buys Rosalia Sanchez. He was already its CEO until 2020, and now he’s back as a sort of ‘lifeline’ to steer the situation post-acquisition Taking advantage of the EU lockdown stock markets, bankers and politicians have launched a 24-hour race against time to prevent a CS-induced crisis from hitting the international financial system. The prestige of this bank, burdened by countless corruption scandals and crimes, has not been experiencing its best moment in recent months. True to its principles of discretion and stability, the Swiss authorities quickly intervened to facilitate the merger of the country’s two largest banks. An unprecedented situation if one considers that the Alpine country has a political system of direct democracy, where decisions are taken unanimously and without haste. To save the face of the Swiss financial market, the government moved quickly to close deals before the end of the weekend. In a serious way, the Swiss President, Alain Berset, announced on March 19 the disappearance of the CS device and its purchase by UBS, with the support of the Executive, for the sum of almost 3,000 million euros. Mission accomplished “The volatility of the markets worried the Swiss government, which knew it could not prolong this situation,” Berset admitted. He bought UBS, with shares and with the backing of the Swiss National Bank (BNS), a bank which on Friday, March 17, at the close of the European stock markets, was worth three times as much. Mission accomplished to the Swiss executive and to the satisfaction of its chief. Little intervention, because of its liberal cut, the Swiss government has provided guarantees equivalent to nine billion francs that will allow CS to cover losses caused by the closure of the Wealth and Investment Management department, which has been hit hardest by corruption and mismanagement scandals. of this entity in recent years. Mario Tuor, Director of the Swiss Department of Finance (SIF) ABC “A solution has been found,” explained to ABC Mario Tuor, Director of the Swiss Department of Finance (SIF). With the result achieved last Sunday, Switzerland showed that stability and confidence in its financial market are guaranteed and that it does not pose a threat to the international financial system. Job losses “The excellent quality of Swiss financial services will always be guaranteed without interruption so that the Swiss Confederation remains among the first places in the global financial markets,” Tour continued. “Although it was proven that CS had a problem, it was also possible to verify that we found the solution,” he added. Confirmed by the same rhetoric by the Association of Swiss Bankers (ASB), “With the merger of CS and UBS, a message of strength was sent that guarantees the stability of the Swiss financial system as a whole,” he told the newspaper. From Basel, the spokesman for this body is Robert Reinke. The banking crisis The sector accounts for only 10 percent of Switzerland’s GDP and 90 percent of its citizens do not work in it. However, there will be consequences that, according to analysts, will mainly center in job losses, post-merger. Of the 36,000 workers added by the two banks in Switzerland, it is estimated that around 16,000 could lose their jobs. In addition, the political results could be reflected in the legislative elections that will be held within six months. The government fears that public opinion will move against the process. Especially if one takes into account that it is not the first time that a similar situation has occurred in the country. To prevent this “bailout from shame”, as the Swiss press called it, from having negative consequences for the executive, the SNB hastened to specify, a few days ago, that it is not a gift to the banks. But it is a “loan” that must be repaid. USB CEO Sergio Emote, March 29 AFP For its part, the main political parties have reacted harshly to this crisis. It took fourteen minutes for the formation of the Swiss far-right, the Democratic Union of the Center (UDC), to accuse its main rival, the Swiss Radical-Liberal Party (PLR), of being responsible for the situation, for its hack of this bank. and preferential treatment in the face of their suspicious activities. Through its president, Thierry Burkart, PLR defended itself by saying that when UBS had to be rescued in 2008 because of its financial scandals, the president of the bank was a member of the UDC and the former Swiss president, Ueli Maurer, was also that party who supported the rescue of this bank affected by Mortgage crisis. It is not just mismanagement and corruption that has caused the downfall of computer science. This week, the bank’s leadership defended itself with an attack: social networks were accused of spreading rumors that had a negative impact on its credibility, accelerating its collapse, as in the case of the bankruptcy of Silicon Valley in the United States. According to analysts, out of the 36,000 workers of both banks in Switzerland, it is estimated that about 16,000 could lose their jobs. A few days ago, Axel Lehmann, head of CS, explained that “despite the loyalty of many customers to the bank, from last autumn’s letters that spread Through social networks, it had a great impact on his reputation. “Tweets” such as those of the Australian journalist David Taylor, who said: “A large international bank is on the edge of the abyss.” In his opinion, messages like this contributed to tarnishing his image internationally. After the head of the bank announced The Saudi national, Ammar Al-Khudairi, said via Twitter that he would not inject more liquidity into CS, which accelerated events.The share price fell, causing a massive withdrawal of funds from the institution.Withdrawal of funds Despite these turmoil, the Swiss are not afraid for their system “Credit Suisse does not exist, but the quality of the system is guaranteed,” says Tor. “All banks opened their doors on Monday morning… that’s how it is proven.” Switzerland is adapting to the changes imposed by the evolution of the international financial and political system. Despite the fact that secrecy The legendary banking no longer exists, financial institutions on Swiss soil continue to play an important role in wealth management and large international investments. The country has a financial system that, in addition to security, provides efficiency in asset management, with the added assurance of having one of the most stable political systems in the world. “Switzerland is not worried about other financial centers, such as Malaysia, because it offers an experience with a long tradition. We have more than two hundred private, regional or cantonal banks located in Central Europe «« Switzerland is not worried about other financial centers, such as Malaysia, because it offers an experience with a long tradition. “We have more than 200 private, regional or cantonal banks located in central Europe,” said Tor. “There will be short-term adjustments, but we will prove that we are able to implement them using new technologies,” added the country’s director of financial management. The lives of the Swiss will not fundamentally change after this banking crisis. The sector accounts for only 10 percent of the country’s GDP and 90 percent are unemployed. For national financiers, CS was only one bank out of two hundred. Definitely the second most important thing, but there are others that can do their job.

See also  “Now we are not in a crisis. We resisted better than expected."

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