ZURICH (Reuters) – Switzerland’s finance minister defended an indiscriminate merger of the country’s two largest banks in an interview with the Swiss newspaper Neue Zürcher Zeitung on Monday and said he would take “extreme measures” to stabilize the situation. He said it was necessary to apply the Situation Law.
“Credit Suisse wouldn’t have survived Monday,” Karin Keller-Sutter said, explaining the need to find a quick solution to Credit Suisse’s predicament.
“Without a solution, the payment deal with CS in Switzerland would be greatly disrupted and even collapsed, wages and bills would no longer be paid,” she said.
It was announced last Sunday that UBS (UBSG.S) had agreed to buy rival Credit Suisse (CSGN.S) for 3 billion Swiss francs ($3.23 billion) in shares. Losses on a merger planned by the Swiss authorities to prevent further turmoil in the global banking market.
The Emergency Act was used to enable banks to reach quick agreements. For example, shareholders who would normally have a say in such acquisitions were largely ignored, angering some.
Keller-Sutter said the Swiss government’s federal council “only went to the extent absolutely necessary to achieve its stabilization goals”.
“If we hadn’t done anything, CS stock would have been worthless on Monday and shareholders would have gone home empty-handed,” she said.
($1 = 0.9199 Swiss Francs)
Reporting by Noele Illien Editing by Giles Elgood
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