sense, I think. But it still wouldn’t make UBS secure, we need to realise that. The global financial system is very fragile. CS was struggling, but not so badly off either. It was meeting all the financial regulator’s requirements. But all it takes is something to happen, and the contagion begins. Governments can neither predict nor prevent financial crises. All they can do is mitigate them in time and prevent a catastrophic outcome. But it is hard to know when best to intervene. Can a small country like Switzerland still afford to have a major global bank, given the risk? There are advantages to having a big bank on your doorstep offering the full range of services. These advantages would be lost if UBS had to spin off its problematic international operations at the behest of lawmakers, or if it moved its headquarters elsewhere. But you would have more stability. Foreign subsidiaries would take care of certain ar- “It is already clear that greater regulation will not solve the problem.” How important was being an international financial hub for Swiss prosperity? We overstate the economic importance. The First World War turned Switzerland into an international financial centre, although in 1914, just before the outbreak of hostilities, we were already the richest country on the European continent based on per capita GDP. Industrial activity was the primary driver of that. Industry was highly dynamic and has underpinned Swiss prosperity from the 19th and 20th centuries to the present day. Switzerland only became a financial hub as a result of industrialisation, with wealth management providing a completely new, rich source of income. This has always had its pros and cons from an economic perspective. What were the drawbacks? High wages in the banking sector attracted many highly qualified workers, who were then missed in other, more innovative industries. With the banking sector now being less of a draw, there is more scope for other industries and innovations to thrive again. Zurich is also a very successful insurance hub – a more predictable and stable line of business that suits the Swiss mentality much better, I feel. March 2023 April 2023 June 2023 Emergency takeover by UBS The crisis at CS comes to a head. Clients withdraw their assets. On the evening of Sunday 19 March, Finance Minister Karin Keller-Sutter announces UBS’s takeover of CS in the presence of the two bank bosses. The federal government pledges 109 billion francs to backstop the emergency sale. The Swiss Sergio Ermotti becomes UBS’s new CEO. Initial snub in parliament In an extraordinary session, the National Council rejects the CS rescue deal. But its decision is largely symbolic. The Council of States votes in favour. The debate reignites on whether lawmakers should do more to keep banks in check. The National Council adopts motions to ban executive bonuses and introduce higher equity ratio requirements. Inquiry into the collapse of CS The National Council and Council of States set up a Parliamentary Investigation Committee (PInC), their most powerful control body. Led by the Centre Party Council of States member Isabelle Chassot (photo), the PInC will this autumn investigate the actions of the Federal Council, the SNB, and FINMA before and during the CS takeover. eas of business – in much the same way that the airline Swiss covers a specific area of the market for its German parent carrier Lufthansa. It would work. The end of banking secrecy did us no harm either, did it? Is Zurich any poorer than it was before? Quite the opposite. Photos Keystone 7
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