The Credit Suisse takeover by UBS is expected to receive CHF 209 billion from the federal government, along with a guarantee for losses up to CHF 9 billion. However, it has recently been revealed that an additional CHF 50 billion will also be added to the government’s aid. The National Bank confirmed this news, and it was reported that Credit Suisse was unable to provide the necessary collateral for the initial CHF 50 billion withdrawal. The loss guarantee for UBS may also increase in the future, as it is uncertain who will bear further losses.
The federal government should provide 209 billion francs for the Credit Suisse takeover by UBS, plus a nine billion loss guarantee. So far, the public has assumed that.
But this amount is not correct: Another CHF 50 billion will be added to the federal government’s liquidity aid for the forced takeover of Credit Suisse by UBS. In the communication “forgotten”, according to “Switzerland at the weekend”, so-called category ELA1 against bankruptcy privilege at this level.
This was confirmed by the National Bank (SNB) when asked by the newspaper.
In addition, Credit Suisse was unable to fully deposit the necessary collateral when it announced the withdrawal of the first CHF 50 billion in liquidity assistance last Thursday night.
According to the newspaper, the loss guarantee for UBS of nine billion francs, which was approved in addition to the liquidity aid, could also increase: in the event of further losses, it would first have to be clarified who would bear them.
In summary, the federal government’s commitment to support the takeover of Credit Suisse by UBS is not just limited to the previously announced amount. An additional CHF 50 billion will be added to the liquidity aid, as confirmed by the National Bank. Furthermore, there remain uncertainties about the loss guarantee for UBS, which could potentially increase. It is important to monitor the situation closely and hold those responsible accountable for the use of public funds in this major transaction.