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In a recent interview with a Zurich newspaper, Swiss Finance Minister Karin Keller-Sutter spoke about the government's intervention to save Credit Suisse from collapsing. She shared that the bank was in a deep crisis, and investor confidence had dropped so much that it would not have survived another day of trading without intervention. She further estimated that the impact of a disorderly bankruptcy could have been as much as double the Swiss economic output, causing a global financial crisis.
The minister emphasized that the Swiss government-brokered purchase of Credit Suisse by UBS over the last weekend was the only viable solution. While the decision has faced criticism for its impact on investors and taxpayers, Keller-Sutter stated that all other options were more risky for the state. She added that an orderly winddown was not an option since it would have caused considerable damage, and Switzerland would have been the first country to wind down a globally systemically important bank.
Keller-Sutter also revealed that Credit Suisse had tapped the Swiss National Bank for "a large multi-billion amount" over the weekend to secure its liquidity. According to her, the figure was above 50 billion Swiss francs ($54.35 billion). She emphasized that the important thing was that the situation had stabilized, and the government's intervention had prevented a significant disruption in payment transactions with CS in Switzerland.
The minister's comments shed light on the precarious situation that Credit Suisse faced and the government's actions to prevent a collapse. While the decision to broker a purchase by UBS has faced criticism, it appears to have been the only viable solution in the face of a potential global financial crisis. The minister's comments also highlight the importance of ensuring the stability of globally systemically important banks to prevent widespread economic damage.
In conclusion, the intervention by the Swiss government to save Credit Suisse from collapsing was a necessary action to prevent significant disruption to payment transactions in Switzerland and a potential global financial crisis. While the decision to broker a purchase by UBS has faced criticism, it appears to have been the only viable solution. The minister's comments emphasize the importance of ensuring the stability of globally systemically important banks to prevent widespread economic damage.
