Saving Credit Suisse costs a quarter of Switzerland’s GDP – Corriere.it

.Switzerland risks paying a high bill for the Credit Suisse affair. The intervention to preserve the country’s reputation as a financial center could amount to 12,500 francs (equivalent to just over 12,500 euros) for every man, woman and child in the country. Doing the math, Bloomberg recalls that the Swiss government has in fact promised up to 109 billion francs to support the sale of Credit Suisse to its rival UBS. To that amount is added the Swiss National Bank’s guarantee of 100 billion francs for the bailout announced on Sunday evening. The total sum of 209 billion is equivalent to about a quarter of Switzerland’s gross domestic product and exceeds total European defense spending in 2021. The cost for the largest bailout ever carried out in the country thus risks being three times more expensive than the 60 billion francs spent to save UBS in 2008. The new intervention also provoked protests. Yesterday, Bloomberg reports, about 200 people gathered in front of the Credit Suisse headquarters in Zurich chanting the slogan eat the rich and throwing eggs at the building in the heart of the city’s financial district.

Meanwhile, UBS ends up under observation by Fitch and other rating agencies for a possible cut in creditworthiness. Fitch has placed UBS’s ratings under observation with negative implications for the stable outlook of the Swiss group’s creditworthiness. The decision comes following the announcement that UBS has agreed to buy Credit Suisse. The lowering of the outlook reflects the uncertain implications of the acquisition on the combined credit profile of the two banks – explains Fitch – and also reflects the risk of execution as well as the potential weakening of the business, risk and financial profile of the leading Swiss bank during the integration and restructuring in an increasingly challenging context. Ubs’ run on the Zurich Stock Exchange continues, in the wake of optimism for the acquisition of Credit Suisse and its wealthy clients. The stock leaps 12%, marking the largest increase in three years and gaining more than 8 billion francs in market capitalizationwhile controversy is mounting in Switzerland over the costs of a publicly financed bailout, the antitrust risks of the merger and the possible redundancies of the merger, which the Financial Times speculates could number in the tens of thousands.