Swiss Federal Agency Starts Probe On Credit Suisse Takeover
Switzerland’s Federal Prosecutor has initiated an investigation into Credit Suisse Group AG’s recent takeover by domestic rival UBS Group AG in the midst of the banking turmoil, reports said.
The Swiss Attorney General’s Office is looking into potential breaches of the country’s criminal law in the government- supported takeover and is gathering evidence to identify possible crimes. The Bern-based agency is investigating any possible wrongdoings by government officials, regulators and executives at the two banks.
In mid March, UBS had agreed to buy Credit Suisse as directed by Swiss financial regulators over concerns of its financial position, after it lost much of its value in the wake of latest banking industry struggles following the failure of U.S banks Silicon Valley Bank and Signature Bank, deemed as the biggest U.S. banking failures since the 2008 financial crisis.
Following the deep loss in its stock value, Credit Suisse, as a decisive action to pre-emptively strengthen its liquidity, borrowed up to 50 billion Swiss Francs or around $53.7 billion from the Swiss National Bank.
But later, as a move to restore necessary confidence in the stability of the Swiss economy and banking system, the Swiss Federal Department of Finance, the Swiss National Bank and the Swiss Financial Market Supervisory Authority FINMA asked both companies to conclude the deal.
Switzerland’s Federal Prosecutor now said that there were numerous aspects of events around Credit Suisse that need to be investigated to identify any possible criminal offenses.
The agency said, “The Office of the Attorney General wants to proactively fulfil its mandate and responsibility to contribute to a clean Swiss financial centre and has set up a monitoring system so that it can take action immediately on any issues that fall within its area of responsibility.”
As per reports, Swiss public and politicians have voiced concerns about the deal, which valued Credit Suisse at 3 billion Swiss francs when announced, and about damage to Switzerland’s reputation as a banking center.
The combined company, with more than 120,000 staff worldwide, is expected to have $1.6 trillion in assets following the planned merger.
Meanwhile, Swiss newspaper Tages-Anzeiger reported that the UBS-Credit Suisse bank was set to cut its workforce by 20% to 30%, and around 11,000 jobs in Switzerland could be affected.
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