Switzerland’s government investigators have begun an inquiry into UBS’s quick takeover of Credit Suisse, to check if any laws were broken.
The Swiss authorities confirmed they are looking into possible wrongdoings by officials, watchdogs, and bosses of the two banks that merged to stop a financial disaster. They found many things connected to Credit Suisse that need to be examined to see if any laws were broken.
The attorney general of Switzerland, Stefan Blättler, said:
The Office of the Attorney General wants to proactively fulfill its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system so that it can take action immediately on any issues that fall within its area of responsibility
Neither Credit Suisse nor UBS said anything about the inquiry.
The Swiss government supported the acquisition of Credit Suisse by UBS for around $3.25 billion in mid-March. This was done as the share prices of Credit Suisse were dropping rapidly. And Swiss regulators feared an impending banking crisis in the country.
Despite this, shareholders of both banks were unhappy as their permission was not sought. The Swiss central bank provided CS with a $54 billion credit facility to help its liquidity and investor confidence, but it did not work.
After the merger, the combined banking institution would have more than $5 trillion in total invested assets. And be the biggest wealth manager, with 25 percent of its risk-weighted assets.
Switzerland’s financial market regulator recently caused a stir when it chose to cancel $17 billion in Credit Suisse’s risky AT1 bonds. This unexpected decision has caused other European financial watchdogs to explain their take on such bonds.
Additionally, UBS is speculated to be cutting its staff by up to 30%, though no official information has been released. To oversee the Credit Suisse takeover, UBS has brought back its former CEO, Sergio Ermotti.
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