Swiss authorities have launched an investigation into the emergency £2.6billion takeover of Credit Suisse by rival UBS.The federal prosecutor is looki
Swiss authorities have launched an investigation into the emergency £2.6billion takeover of Credit Suisse by rival UBS.
The federal prosecutor is looking into possible breaches of criminal law by government officials, regulators and executives at the two banks. UBS and Credit Suisse agreed the deal over a frantic weekend a fortnight ago.
It was feared that without a rescue Credit Suisse would implode – potentially spurring a meltdown for the wider global banking sector.
The prosecutor’s office said yesterday that there were ‘numerous aspects of events around Credit Suisse’ that warranted investigation and that these needed to be analysed to ‘identify any criminal offences that could fall within the competence of the [prosecutor]’.
‘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,’ the statement said.
Rescue: UBS and Credit Suisse agreed the deal over a frantic weekend a fortnight ago
It did not indicate any specific aspects of the takeover that would be looked into or how long the investigation might last.
Both UBS and Credit Suisse declined to comment.
Last month’s deal came as Credit Suisse teetered on the brink. The perennially troubled lender was already fighting to recover after a £99billion exodus of funds at the end of last year helped to push it into a £6.5billion annual loss. It suffered another wobble after the collapse of a series of US lenders including Silicon Valley Bank.
Then, the declaration of its biggest shareholder, Saudi National Bank, that it would not put in any more funds pushed its share price into a further sharp decline.
That prompted the so-called ‘shotgun marriage’ with UBS orchestrated by the Swiss government, central bank and financial regulators.
Some observers think the deal will prove a huge success for the buyer as it acquires its long-time rival at a bargain basement valuation. It is likely to prove less happy for many of the 120,000 employees of the combined group – 11,000 of them in the UK.
Reports in Switzerland over the weekend suggested that it will result in up to 30pc of jobs going – which could translate to thousands in London, though no details of where the axe will fall has been laid out yet.
Probe: The prosecutor’s office said that there were ‘numerous aspects of events around Credit Suisse’ that warranted investigation
A survey of Swiss economists found 48 per cent would have preferred a state takeover and possible later sale of Credit Suisse, with just 19 per cent seeing the UBS deal as the best option.
The sheer scale of the new institution, which will have £1.3trillion in assets, is among concerns, as is the size of liquidity support and guarantees worth £230billion offered by the Swiss government and the country’s central bank.
Shareholders will have the chance to air grievances over the takeover when both banks hold their annual general meetings this week.