Swiss government reiterates financial commitment to Credit Suisse deal

ZURICH, Switzerland – The Swiss government said commitments to the Swiss National Bank (SNB) and UBS to ease the takeover of Credit Suisse will not be affected by parliament’s rejection of 109 billion Swiss francs ($121 billion) in emergency credits and guarantees.

In a largely symbolic vote, these commitments were last week rejected twice by Switzerland’s lower house of parliament.

The Swiss Cabinet acknowledged parliament’s decision at its meeting on Wednesday, April 19, but made clear its commitments would not be affected as they had binding approval via emergency law.

“Parliament debated these credits on the premise that a rejection would have no legal effect on the Confederation’s emergency commitments made to the SNB and UBS,” it said.

“The Federal Council shares this legal opinion,” the government said in a statement.

Switzerland’s tradition of consensus politics has taken a battering after the government used an emergency law to push through a state-backed takeover of Credit Suisse by UBS, sidelining parliament.

The defeat is a blow for the government in an election year and makes it harder to build broad support among the population for the biggest corporate rescue in Swiss history.

If non-approval of the credits by parliament were to result in the government having to fully or partially reverse commitments already undertaken, the Cabinet said its ability to act in times of crisis would be significantly impaired.

Still, the government said it would take parliament’s position into account in its future work and decisions.

“On the one hand, this applies to the negotiations with UBS on the guarantee contract,” it said, adding: “But only to the extent that this does not jeopardize the takeover of Credit Suisse by UBS.” – Rappler.com

$1 = 0.8998 Swiss francs