The Swiss government has demanded that bonuses for workers at Credit Suisse be frozen as the firm is taken over by its rival UBS. The news comes as staff at the soon-to-be merged bank have expressed concerns about losing their jobs, despite the firm assuring that no jobs will be cut.
The compensation that has been frozen by the government relates to bonus checks that were granted but deferred for the financial years up to 2022. This includes awards of shares as part of staff bonuses. The reason for the measure is because Swiss law stipulates that when the government gives aid to bail out a Swiss bank, remuneration-related restrictions should be applied.
While Credit Suisse had been troubled for a number of years, following a series of scandals and financial blunders, the crisis accelerated last week when the Swiss National Bank gave the firm a 50 billion franc loan, designed to prevent a crisis of confidence regarding the bank's finances. However, this failed to end the crisis, with the situation only calming when rival bank UBS agreed to purchase the troubled institution over the weekend.
While the merger has somewhat stabilised worries about the Swiss financial system, it has caused concern amongst Credit Suisse workers, with many of them fearing their jobs could be cut as the merger gathers pace. Credit Suisse already announced thousands of job cuts in 2022, and despite UBS's assurances about the future of the company’s staff, unions and representatives of the government are still worried.
“Hundreds of jobs are at stake, and it will be a matter of limiting social cuts,” Geneva’s Economics Minister Fabienne Fischer told Swissinfo. The Swiss financial sector employs 230.600 workers, with 16.000 of them working for Credit Suisse. The bank also indirectly supports workers in other sectors: “In addition, tens of thousands of jobs outside of the banking industry would potentially be at risk”, the Swiss Bank Employees Association (SBEA) stressed.
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