by Dismal-Jellyfish
Switzerland’s parliament rejected on Wednesday the government’s 109 billion Swiss francs ($120.82 billion) aid for Credit Suisse’s merger with UBS, leaving the fallen bank’s hastily arranged rescue without a largely symbolic parliamentary blessing.
While the upper house had approved the government’s contribution to the rescue package, parliament’s lower, and larger chamber, pushed back again on Wednesday.
It had already rejected the proposals in a late night session on Tuesday, forcing the upper house to find a solution when it met again on Wednesday.
Seeking a compromise, the upper house passed changes to the measure on Wednesday morning, but it was not enough to sway the lower house lawmakers.
They turned it down by 103 votes to 71 in favour, a similar level of opposition to the night before.
Speaking just before the lower house vote, Cedric Wermuth, the co-president of the Social Democrats said the party just could not support the funding.
While the government’s commitment, made using emergency law, cannot be overturned, the vote marks a symbolic rebuke for the authorities, whose decision to largely bypass the nation’s legislative has angered many politicians.
“This decision has no impact on the takeover of Credit Suisse decided on March 19,” the Swiss Finance Ministry said after the vote.
The support package had already been given binding approval by the parliament’s finance delegation, due to the urgency of the matter, it said.
“The funds have already been fully committed,” it added.
Lawmakers who backed an approval of the deal, voiced concern about Switzerland’s image.
“It doesn’t really matter what we decide in detail, but it would really send a bad signal if these loans were rejected,” said Eva Herzog, who is a member of the Council of States, the upper house, before the vote.
Following a day of heated debates held in the country’s four national languages, that continued into early morning hours, the upper house passed changes aimed at winning over the sceptics.
They included a proposal for Switzerland’s federal government to draft an amendment to the country’s Banking Act. Its aim would be to reduce the risks posed by systemically relevant banks, such as Credit Suisse and UBS for Switzerland, by, for example, raising capital requirements and restricting bonuses.
Addressing parliament before the vote on Wednesday, finance minister Karin Keller-Sutter told lawmakers to consider what message their rejection of the rescue would send to the world.
“What signal do you want to give internationally, are the institutions reliable, do you value financial market stability in a place where you already have a financial centre with a certain importance?”
Lawmakers were recalled to the country’s capital, Bern, for the rare extraordinary session to discuss the Swiss government’s open chequebook response to a collapse that many in the country have blamed on Credit Suisse’s top management.
Last month’s shotgun marriage which saw the bank taken over by rival UBS for 3 billion Swiss francs and propped up with more than 250 billion Swiss francs in guarantees and support has drawn widespread criticism.
The government invoked Swiss emergency law to sign it off to the ire of the almost 250 lawmakers left without a say.
“The use of emergency law has reached a level in the last three years that is beginning to annoy me,” Hansjoerg Knecht, a member of Parliament’s upper house, said on Tuesday.
Additional Coverage:
www.dw.com/en/swiss-parliament-symbolically-rejects-credit-suisse-rescue/a-65295389
The Swiss lower house of parliament voted overwhelmingly on Wednesday against the 100 billion Swiss francs (roughly $110 billion or €100 billion) rescue package that saw banking giant UBS taking over its rival Credit Suisse.
The rebuke is, however, only symbolic, with the money already having been signed off by the Swiss government via an emergency law.
“This decision has no impact on the takeover of Credit Suisse decided on March 19,” the Swiss Finance Ministry said after the vote.
“On March 19, 2023, the Finance Delegation of the Swiss Parliament had already given its binding approval to the commitment credits on behalf of Parliament due to the urgency of the matter,” it said.
Rejection sends a ‘bad signal’
Wednesday’s vote came after the upper house offered amendments to sweeten the deal following previous failed votes.
It saw parties from the right and the left wings of the parliament come together in a rare voting bloc, with the final tally at 103-71.
The government’s decision to push through the rescue package has angered many in a country that is used to frequent referendums on a variety of policy issues.
Despite the mere symbolism of Wednesday’s vote, the attempt by the upper house to seek a compromise makes clear how muchthe government had hoped to secure the legislature’s retrospective approval.
“It doesn’t really matter what we decide in detail, but it would really send a bad signal if these loans were rejected,” Eva Herzog, a member of the Council of States, the upper house, said before the vote.
Why did the Swiss government orchestrate the Credit Suisse buyout?
The Swiss government negotiated the UBS buyout of Credit Suisse in order to prevent the 167-year-old banking institution from collapsing and possibly triggering further crashes across the global banking system.
UBS agreed to pay 3 billion Swiss francs to take on its troubled rival but on the condition of billions more in guarantees from the Swiss central bank.
The government may have prevented further banking troubles with its rescue deal, but Wednesday’s vote represents disapproval of the move ahead of legislative elections set to take place this October.
www.reuters.com/world/europe/swiss-parliament-meets-second-day-over-credit-suisse-rescue-2023-04-12/
Switzerland’s parliament rejected on Wednesday the government’s 109 billion Swiss francs ($120.82 billion) aid for Credit Suisse’s (CSGN.S) merger with UBS (UBSG.S), leaving the fallen bank’s hastily arranged rescue without a largely symbolic parliamentary blessing.
While the upper house had approved the government’s contribution to the rescue package, parliament’s lower, and larger chamber, pushed back again on Wednesday.
It had already rejected the proposals in a late night session on Tuesday, forcing the upper house to find a solution when it met again on Wednesday.
Seeking a compromise, the upper house passed changes to the measure on Wednesday morning, but it was not enough to sway the lower house lawmakers.
They turned it down by 103 votes to 71 in favour, a similar level of opposition to the night before.
Speaking just before the lower house vote, Cedric Wermuth, the co-president of the Social Democrats said the party just could not support the funding.
While the government’s commitment, made using emergency law, cannot be overturned, the vote marks a symbolic rebuke for the authorities, whose decision to largely bypass the nation’s legislative has angered many politicians.
“This decision has no impact on the takeover of Credit Suisse decided on March 19,” the Swiss Finance Ministry said after the vote.
The support package had already been given binding approval by the parliament’s finance delegation, due to the urgency of the matter, it said.
“The funds have already been fully committed,” it added.
Lawmakers who backed an approval of the deal, voiced concern about Switzerland’s image.
“It doesn’t really matter what we decide in detail, but it would really send a bad signal if these loans were rejected,” said Eva Herzog, who is a member of the Council of States, the upper house, before the vote.
Following a day of heated debates held in the country’s four national languages, that continued into early morning hours, the upper house passed changes aimed at winning over the sceptics.
They included a proposal for Switzerland’s federal government to draft an amendment to the country’s Banking Act. Its aim would be to reduce the risks posed by systemically relevant banks, such as Credit Suisse and UBS for Switzerland, by, for example, raising capital requirements and restricting bonuses.
Addressing parliament before the vote on Wednesday, finance minister Karin Keller-Sutter told lawmakers to consider what message their rejection of the rescue would send to the world.
“What signal do you want to give internationally, are the institutions reliable, do you value financial market stability in a place where you already have a financial centre with a certain importance?”
Lawmakers were recalled to the country’s capital, Bern, for the rare extraordinary session to discuss the Swiss government’s open chequebook response to a collapse that many in the country have blamed on Credit Suisse’s top management.
Last month’s shotgun marriage which saw the bank taken over by rival UBS for 3 billion Swiss francs and propped up with more than 250 billion Swiss francs in guarantees and support has drawn widespread criticism.
The government invoked Swiss emergency law to sign it off to the ire of the almost 250 lawmakers left without a say.
“The use of emergency law has reached a level in the last three years that is beginning to annoy me,” Hansjoerg Knecht, a member of Parliament’s upper house, said on Tuesday.
news.yahoo.com/swiss-parliament-rejects-credit-suisse-141614813.html
Switzerland’s parliament rejected a multibillion dollar Credit Suisse rescue package on Wednesday (April 12).
The deal included close to $121 billion in financial guarantees.
The vote was largely symbolic as the government’s commitment to financial guarantees cannot be overturned.
Authorities used an emergency law to largely bypass the legislative body last month to rescue the lender.
The move angered politicians, and saw widespread criticism in Switzerland.
It was the focus of a strident debate between Swiss lawmakers on Tuesday, which ran into the early hours.
This was Swiss President Alain Berset speaking on Tuesday.
“A Credit Suisse bankruptcy would have had disastrous consequences for the country, for companies, for private clients, but also for the reputation of Switzerland. So, in this context, we had to act fast, the federal council had to use the emergency law.”
Lawmakers were recalled to the country’s capital Bern this week for the rare extraordinary session to discuss Credit Suisse’s rescue.
The lender was taken over by rival UBS for just over $3 billion last month.
It was also backed up by $277 billion in guarantees and support.
TLDRS:
While the government’s commitment, made using emergency law, cannot be overturned, the vote marks a symbolic rebuke for the authorities, whose decision to largely bypass the nation’s legislative has angered many politicians.
It is definitely still happening even with this purely symbolic vote. It seems the politicians are wanting to save their own hides? Have it shown on record they are against this when the ramifications of it all begin to be felt?