Credit Suisse: Swiss parliament denies bank rescue – 04/12/2023 – Market

Switzerland’s parliament on Tuesday failed to approve the 109 billion Swiss francs ($120.5 billion) in financial guarantees used to bail out Credit Suisse last month in a vote first-round vote that was largely symbolic, as the state had already committed resources.

The Swiss Chamber of Deputies rejected the bailout after heated debates that continued into the early hours as members discussed other measures related to the bank.

Earlier on Tuesday, Switzerland’s upper house had approved the bailout, meaning both Swiss houses of parliament will have to vote on the matter again on Wednesday.

Lawmakers were convened for a rare extraordinary session to discuss the swift rescue of Credit Suisse and the Swiss government’s response to a collapse that many in the country blamed on problems in top management.

The forced marriage in which the bank was acquired by rival UBS for 3 billion Swiss francs (R$ 16.6 billion) and sustained with more than 250 billion Swiss francs (R$ 1.3 trillion) in guarantees and government support has been the object of widespread criticism in the country.

Although 29 out of 46 members of Switzerland’s Council of States earlier on Tuesday approved the bailout, it was later rejected by 102 of the 200 members of the National Council.

The votes are, however, largely symbolic because the Swiss state has already committed the funds and lawmakers cannot overturn that decision.

In the run-up to the merger last month, Swiss emergency law was used to get a subgroup of six members of parliament to approve the financial commitment on behalf of the legislative body, angering the nearly 250 lawmakers left without a say.

“The use of emergency law has reached a level in the last three years that is starting to bother me,” said Hansjoerg Knecht, a member of the upper house of parliament.

Calling the situation where the legislature can only approve already pledged credits “unsatisfactory”, Knecht said that if Credit Suisse needs more money, there should be no use of emergency law to bypass parliament.