The fallout from the UBS-Credit Suisse merger continues: a new poll by Qualinsight has found that a majority of taxpayers in Switzerland disapprove of the bailout package given to Credit Suisse and UBS by the government. It follows a heated emergency debate in parliament which saw politicians symbolically reject the bailout plan for the embattled Swiss bank, with officials warning the fallout from the scandal could have knock-on effects on the overall economy.
According to the study, reported in 20 Minuten, 61 percent of people who pay Swiss taxes said that the government stepping in to bail out Credit Suisse was wrong. Only around a quarter of people thought the bailout was necessary to prevent what Finance Minister Karin Keller-Sutter described at the time as “irreparable economic turmoil.”
Thanks to the crisis, a number of respondents said they had lost faith in the banking system, although half still consider Swiss banks to be as good or bad as banks abroad, and a third maintain that Switzerland is still one of the safest financial centres. This adds to a previous study which found that the Swiss brand has suffered a drop in reputation in recent months, thanks in part to the scandals at Credit Suisse.
61 percent of those surveyed blame the current turmoil on poor management at the firm, while 40 percent said the crisis was caused by a lack of transparency and state monitoring. As a result, around 35 percent wanted better regulations to be put in place to avoid a “too big to fail” bank coming about, although only 25 percent were in favour of nationalising Credit Suisse.
As for the government’s response to the crisis, only 14 percent viewed the actions of the Federal Council favourably, while 20 percent considered the bailout inevitable and 27 percent thought the banks had too much of a say on how events took shape - especially with a view to bankers bonuses and workers at Credit Suisse losing their jobs. However, only 12 percent said they would not like the government to intervene at all.
The new poll follows a heated evening in the Swiss parliament in Bern which saw the National Council - the lower house - reject the 109 billion franc package offered to UBS and Credit Suisse as part of the bailout / merger, despite passing the upper house easily. At a raucous, and according to 20 Minuten wine, cheese and gin-fuelled emergency meeting on April 12, the Federal Council were unable to convince the house to vote for the bill.
In opening the session, the President of Switzerland, Alain Berset, argued that “the government was forced to act, in the interest of the country, the institutions and the national economy”, making the point that confidence in Credit Suisse had been eroded by years of scandals, not the events of the last few weeks. As part of the bailout plan, the government has announced a full investigation into what happened, to be published within 12 months.
“If a yes means that we will…calm down some kamikaze bankers and give them a guarantee that the paternal state will bear responsibility next time, then I will vote no”, explained Social Democratic (SP) National Councillor Roberto Zanetti. SP president Cédric Wermuth concluded that “it is our job to put chains on this monster [the future merged Credit Suisse / UBS] so it can never fool democracy again.”
His colleague from across the political aisle, Swiss People’s Party councillor Thomas Matter, agreed, voicing “dismay, horror, shock, bewilderment and consternation.” “Even worse than the collapse of Credit Suisse is the loss of confidence in Switzerland around the world”, he added - Swissinfo noted that major investors like the state of Qatar have already started to pull out of some of their Swiss investments like hotels in Lausanne, Lucerne and Bern.
Despite the rejection by parliament, the votes in the National Council are purely symbolic as the money has already been approved. However, their votes will give the chamber influence on how the 109 billion francs will be used, with parties calling for guarantees on climate sustainability, and most crucially, a curb on bankers’ salaries and bonuses.
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