Heated Debates In Parliament Over UBS-Credit Suisse Bailout

The Swiss Senate, meeting in an extraordinary session, has approved government credits granted as part of last month's UBS-Credit Suisse merger. The House of Representatives is expected to vote later in the evening.

The Senate backed the CHF109 billion ($120 billion) government credits on Tuesday by 29 votes to six, with seven abstentions. At the same time it called on the government to answer a long list of questions about the deal and its consequences. The government has already promised a full report to parliament within 12 months.

This is only the third extraordinary parliamentary session in more than two decades – after one on the collapse of Swissair and one on measures to tackle the Covid-19 pandemic. Many politicians are angry that parliament was not consulted on the deal to save ailing Credit Suisse and the government credits granted as part of the package.

Parliament cannot block the deal, which was done under emergency legislation with approval from the six-member parliamentary finance delegation, but it can impose conditions notably on how the CHF109 billion is used. The Green Party, for example, wants guarantees on climate sustainability, and there have been calls for limits on bank managers' salaries and bonuses.

Interior Minister Alain Berset, who holds the rotating Swiss presidency this year, opened the session with a defence of the emergency deal, telling parliamentarians that the clock was ticking and“the government was forced to act, in the interest of the country, the institutions and the national economy”. He said confidence in Credit Suisse had not disappeared overnight but had been eroded for years by directors who had not learned the lessons of the previous financial crisis.

Indeed, Credit Suisse managers came in for some harsh criticism. In their greed for more profit they had ignored risks, Peter Hegglin of the Centre Party told the session. Social Democrat Eva Herzog said the 2008 financial crisis had not been enough to make the“Wolf of Wall Street” type of banker disappear. She and other politicians called for liability suits and claims for damages.

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