Swiss prosecutor investigates Credit Suisse takeover by UBS

This {photograph} taken on March 24, 2023 in Geneva, exhibits an indication of Credit score Suisse financial institution.

Fabrice Coffrini | AFP | Getty Photos

Switzerland’s Federal Prosecutor has opened an investigation into the state-backed takeover of Credit Suisse by UBS, the workplace of the lawyer common stated on Sunday.

The prosecutor, primarily based within the Swiss capital Bern, is wanting into potential breaches of the nation’s legal legislation by authorities officers, regulators and executives on the two banks, which agreed on an emergency merger final month to keep away from a meltdown within the nation’s monetary system.

There have been “quite a few features of occasions round Credit score Suisse” that warranted investigation and which wanted to be analysed to “establish any legal offences that would fall throughout the competence of the”, it stated in a press release.

“The Workplace of the Lawyer Common desires to proactively fulfil its mandate and accountability to contribute to a clear Swiss monetary centre and has arrange a monitoring system in order that it may possibly take motion instantly on any points that fall inside its space of accountability,” it added.

It gave no indication of any particular features of the merger settlement it would look into or how lengthy the investigation would possibly final.

Each UBS and Credit score Suisse declined to remark.

Out of the extraordinary

“It is astonishing that the prosecutor would remark,” stated Mark Pieth, professor emeritus of the College of Basel, the place he has taught legal legislation and criminology. However the rescue “is so out of the extraordinary that they needed to say one thing.”

Pieth stated the prosecutor could possibly be probing breaches of secrecy provisions by officers, or the buying and selling on inside data, including that the wiping out of some bondholders as deliberate below the deal can also be problematic.

Within the deal introduced on March 19 and orchestrated by the Swiss authorities, the central financial institution and market regulator, UBS would purchase rival Credit score Suisse for 3 billion Swiss francs ($3.3 billion). The financial institution is attempting to shut the deal by as quickly as the top of April, sources have instructed Reuters.

The Swiss public and politicians have voiced issues in regards to the degree of state help, with practically 260 billion Swiss francs in liquidity and ensures provided by the federal government and Swiss Nationwide Financial institution.

A ballot of Swiss economists discovered that almost half assume the takeover of Credit score Suisse was not the very best answer, and warned that the state of affairs had dented Switzerland’s fame as a banking centre.

The takeover, which was additionally designed to assist safe monetary stability globally throughout a interval of turmoil, has sparked concern amongst critics in regards to the measurement of the merged financial institution, with $1.6 trillion in property and greater than 120,000 employees worldwide.

As much as 30% of employees might lose their jobs because of the takeover, in response to an unnamed senior UBS supervisor quoted in Swiss media.

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