The Swiss National Bank offered a major support to Credit Suisse, which experienced a plummet in its shareholders' and stakeholders' trust, and resulting in a significant outflow of customers. The SNB gave 168 billion Swiss francs ($185 billion) in emergency liquidity, giving the central bank, FINMA and the Swiss authorities the time to come up with a plan for Credit Suisse's crisis sale to UBS in March.
Thomas Jordan, the Chairman of the Swiss National Bank, declared on Wednesday that the interventions of the SNB during the Credit Suisse crisis were "indispensable" in avoiding a global "financial crisis". The SNB provided substantial help to the floundering bank when investor and shareholder confidence diminished, causing substantial customer withdrawals. To tackle the predicament, the SNB injected an astonishing 168 billion Swiss francs ($185 billion) worth of emergency funding. This allowed the central bank, together with FINMA and the Swiss authorities, to successfully ink a bargain-priced agreement in March for the transfer of Credit Suisse to domestic competitor UBS, valued at 3 billion Swiss francs.
Jordan proclaimed at an event in Bern, Switzerland that "the SNB's readiness and capacity to administer liquidity was vital for the management of Credit Suisse's urgent predicament and in preventing a financial crisis with grave effects for Switzerland and the entire world."
In August, UBS declared that Credit Suisse's government and central bank securities were terminated upon completion of the purchase and that a 50 billion Swiss franc ELA+ loan from the SNB had been repaid.
Jordan argued that, without the ELA+ loan which did not have the typical collateral as required by the SNB, Credit Suisse was in danger of not being able to pay off its debts, thereby posing a threat to systemic stability. This view was echoed by FINMA CEO Urban Angehrn, who remarked in April that if Credit Suisse were to go bankrupt, it would cause chaos in the Swiss economy and likely lead to customers pulling out their deposits from other banks. Jordan additionally believes that valuable lessons can be taken away from this situation in terms of liquidity regulations and preventing larger and more rapid withdrawals of customer deposits, according to Reuters. The Swiss government, SNB and FINMA have been urged to answer for their decisions in the takeover of Credit Suisse, especially concerning the lack of shareholder input and the AT1 bonds which were written off to zero while the investors got payouts.
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