The FDP wants to save Credit Suisse’s Swiss business
Party leader Thierry Burkart asks the Federal Council to continue the local area of the CS in an independent bank. Does UBS lend a hand voluntarily?
Will the CS domestic business remain independent? This decision must be made before the CS’s integration into UBS begins, says FDP President Thierry Burkart.
Photo: Peter Klonzer (Keystone)
After the emergency takeover of CS by UBS, politicians fear the new banking giant. If UBS ever gets into trouble, it will be difficult for Switzerland to save such a “monstrous bank” on its own, so the fear is there. But UBS’s new dominance in the domestic business is also causing unease. That is why the FDP now wants to separate the CS domestic business from UBS and continue it in an independent bank.
This decision must be made quickly before the integration of the CS into UBS can begin, says FDP President Thierry Burkart. Therefore, the Free Democratic Party is submitting a proposal to the Economic Committee (WAK) of the Council of States next Monday, in which the Federal Council is requested to take the appropriate steps. The aim is to keep as many jobs in Switzerland as possible, to reduce UBS’s now larger risks and to ensure local competition, says Burkart.
The Federal Council can apply pressure
However, UBS itself has not yet shown any intention to give up the domestic CS business. On the contrary: according to a report in the Financial Times, the local bank of CS is considered by UBS as a “jewel in the crown”, which does not speak in favor of a split. It is not clear at the moment what leverage politicians have over UBS if they want to preserve CS’s local business.
FDP Council of State and WAK member Martin Schmid sees different possibilities. In this way, the Federal Council can put pressure on UBS. In addition, due to the “too big to fail” law, detailed plans have already been drawn up on how to separate the Swiss business from the big banks in the event of a crisis. These prepared plans can be implemented immediately, with the Federal Council, Finma and the Swiss National Bank likely to take the lead. According to Schmid, competition law is another factor. Even if CS has already been taken over by UBS, Parliament can subsequently introduce legislation that competition law will prevent any bank from obtaining such a monopoly position.
Schmid says the de facto monopoly of local business in favor of small and medium-sized businesses and taxpayers must be prevented. Otherwise, companies would only have UBS to fund foreign business, for example. A split from CS’s domestic business would also reduce the huge concentration of risk and risk to taxpayers that has now arisen from UBS’ acquisition of CS. For UBS and its shareholders, Schmid says, a split into CS’s domestic business in an IPO wouldn’t be a loss. On the contrary: in return, UBS shareholders will participate in the new, small and profitable Credit Suisse Switzerland local business by receiving shares, which they can in turn sell.
“You have to give UBS some time now, because the takeover agreement is only three days old.”
Thomas Matter, senior vice president of the National Council and entrepreneur-banker, assumes that UBS will sell the Swiss business of CS on its own. “You have to give UBS some time now, because the takeover agreement is only three days old.” There are just no arguments against CS Swiss remaining business with UBS Economic reasons. “UBS will realize its responsibility and will not want to put more than 10,000 employees on the streets in Switzerland.” But if UBS does not sell the Swiss business of CS on its own, political pressure will have to be applied, Matter says.
The SP supports the demand for an independent continuation of the CS domestic business, even if it is not one of its primary demands. Socialist faction leader Roger Nordmann says the lever for this is segregated banking. The focus here is on separating investment from commercial banking. In addition, the domestic business must be separated from overseas subsidiaries. In this way, computer science can once again become locally independent, Nordman says.
Central President Gerhard Pfister also wants to limit risks to the Swiss economy from the newly created giant bank. An analysis now needs to be done whether this requires a single and independent continuation of the local computer services business or the introduction of a separate banking system. For Pfister, the deciding factor is which solution Swiss residents will benefit the most from. The shocking thing is that the Swiss people have to bear the financial consequences of CS leadership mismanagement. So it must be checked whether UBS has to pay for far-reaching state guarantees.
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