Swiss taxpayers no longer bear any risk relating to the rescue of Credit Suisse after UBS Group AG decided to end an agreement with the government to cover losses it could incur, Finance Minister Karin Keller-Sutter said on Friday.
(Bloomberg) — Swiss taxpayers no longer bear any risk relating to the rescue of Credit Suisse after UBS Group AG decided to end an agreement with the government to cover losses it could incur, Finance Minister Karin Keller-Sutter said on Friday.
The federal government hasn’t had to pay out a single franc in connection with the deal it brokered in March, she said.
“On March 19, it was necessary to give these guarantees, but I always knew that for UBS it would be politically difficult to use this guarantee,” Keller-Sutter told a news conference, adding that alternative solutions back then would have led to a greater risk for taxpayers.
UBS said earlier on Friday it will voluntarily terminate a 9 billion franc ($10.3 billion) Loss Protection Agreement with the Swiss government. It also said it will end a liquidity backstop with the Swiss National Bank of as much as 100 billion francs and that Credit Suisse has fully repaid a 50 billion franc emergency liquidity assistance loan.
Keller-Sutter said the government will have to decide “with a cool head and without anger” what reforms need to be carried out in the banking industry following the rescue, adding that supervision will certainly be on the list of topics.
“I don’t have the answer yet,” she said.
Read More: UBS Ends $10 Billion State Backstop That Helped Seal Merger
–With assistance from Myriam Balezou.
(Updates with comments from finance minister starting in fifth paragraph.)
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