New secret report on the demise of Credit Suisse

Headquarter of Credit Suisse at Paradeplatz in Zurich
The people are not allowed to know the details about the emergency merger between CS and UBS. (Image: media service)

A report on the demise of Credit Suisse has emerged in Bern. Explosive information has come to light, but much is to remain secret.

The Swiss Parliament’s Control Committees (GPK) presented their 2023 annual report this week and hardly anyone noticed the explosive nature of the communiqué.

Right at the beginning, it was stated, somewhat cryptically, that the GPKs dealt with various topics in 2023 that had not previously been communicated.

It leaves you speechless

However, these topics also included the role of the federal authorities in the takeover of Credit Suisse (CS), explained Erich Hess from the National Council and Charles Juillard from the Council of States.

And some of the statements in the 2023 Annual Report from page 25 onwards almost leave readers breathless.

On March 19, 2023, the big bank UBS announced at a media conference convened by the Federal Council that it was ready to take over CS, it said casually by way of introduction.

“This announcement followed a week of uncertainty on the financial markets, during which the Credit Suisse share price fell by up to 30 percent in one day, forcing the Swiss National Bank (SNB) to provide the bank with liquidity of up to 50 billion Swiss francs,” the annual report of the Audit Committee reads –  verbatim.

Until now, however, it was officially stated that CS had asked for this liquidity in exchange for collateral. Moreover, the Swiss central bank has maintained to this day that it ‘never acted actively’.

Switzerland wanted bank merger

Regarding the emergency merger, the parliamentarians went on to write in the document: “The Federal Council actively steered the preparatory work for this takeover.”

This is also new, as it was previously Finance Minister Karin Keller-Sutter who orchestrated this emergency merger and then presented it to the national government as the ‘best solution’.

There had previously been no talk of actively steering the big bank merger in Switzerland.

President, SNB and Finma

Following the announcement of Switzerland’s package of measures, the GPK decided to carry out preliminary investigations in order to obtain information on the chronology of events and on the management of the federal authorities in the run-up to and in the context of this crisis.

According to their annual report, the GPK conducted various hearings in which they interviewed an enormous number of people.

These included the then President of the Swiss Confederation Alain Berset, the Head of the Federal Department of Finance (FDF) Karin Keller-Sutter and representatives of the SNB and the Swiss Financial Market Supervisory Authority (FINMA).

They were each asked to explain their roles in monitoring CS’s difficulties from fall 2022 and during the actual crisis.

External advisor consulted

The Federal Office of Justice and an external expert were also consulted on the question of the application of emergency law in the present case.

Last, but not least, the working group ‘Federal Risk Management’ of the GPK held a hearing with the President of the Confederation and responsible representatives of the administration, which enabled the commissions to place the management of the Credit Suisse crisis in the broader context of the Confederation’s risk management.

None of this work and the questioning of an apparently legal expert had previously been made public.

Clarifying the circumstances

At their meeting on May 15, 2023, the two GPKs then determined the need for more in-depth clarifications based on the information they had received in the course of their work to date. Apparently, there were many inconsistencies.

These clarifications, in particular, were intended to extend the scope of the investigation to include relevant developments from previous years.

The politicians wanted to take a closer look at aspects such as the early detection of crises by the FDF and the involvement of the Federal Council, the supervision of CS by FINMA, the role of the SNB, the application of emergency law, the evaluation and monitoring of the impact of the too-big-to-fail law (TBTF) and the circumstances surrounding the resolution in March 2023.

Rights of interviewees as problem

However, the GPK’s preliminary investigations were then immediately discontinued when the Federal Assembly decided to set up the Parliamentary Investigation Committee (PUK) on June 7 and 8, 2023.

As part of its preliminary investigations, the GPK also delved into the information and procedural rights of a PUK in order to clarify the extent to which a PCC set up at a later date could rely on any preliminary work carried out by the GPK.

As a PUK has more extensive information rights, the rights of those affected by a PUK also go further than is the case with GPK proceedings.

Parliamentarians’ trick

For example, the GPK may only pass on information – in particular the minutes of hearings and working papers based on them – to a PUK if the PUK expressly requests it and the persons affected by these documents have given their consent.

The Federal Council would also first have to be consulted and give its consent to the disclosure. However, none of this was apparently done and the GPK resorted to a ‘trick’.

According to current law, and the applicable procedures, the GPK is permitted to publish its findings in a report before setting up a PUK or to inform the PUK about the committees’ approach to the preliminary investigations.

Declared classified information

After completing its work the GPK did in fact draw up a brief report for the attention of the PUK, which summarizes the process and guidelines of the preliminary investigations and provides an overview of the hearings held, the documents produced and the information gathered.

However, given the long list of people who were interviewed, it can hardly be called a short report. wanted to see this “summary report”.

However, SVP National Councillor (BE) and President of the GPK-NR Hess made it clear in response to a request from the business news portal that this report would ‘remain under lock and key’.

Decision missing

At best, the GPK secret report on the role of the federal authorities in the downfall of CS could be made public after the results of the PUK have been published, it was said. However, the politician Hess went on to explain that this would still require a decision by the GPK.

The SVP politician remained silent on the reasons why the public could not have this GPK report and furthermore on the content of the document.

A request for access under the Public Access Act would also be pointless, he instructed.

The people must only pay

But the new facts alone cast the demise of CS in a completely new light. Until now, there had been no mention of any active role on the part of the SNB or the entire Federal Council.

With even more facts from the full report, the people would have even more knowledge about the latest big bank disaster. In any case, it is not clear why the people of this country supposedly do not have the right to receive this report.

After all, they paid handsomely for the hidden report and for the downfall of CS in full.


New secret report on the demise of Credit Suisse

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