The major Swiss bank Credit Suisse is at the end: The global player in the financial industry has got into financial difficulties so dramatically that it is being taken over by its competitor UBS. The biggest bank merger since the financial crisis 15 years ago was frantically decided over the weekend.
UBS, also based in Switzerland, is doing this at the urging of the state, which is supporting the whole operation by taking on financial risks. Because Credit Suisse is “too big to fail”. It is too big to be allowed to go bankrupt without triggering an even worse banking crisis with unforeseeable consequences. After the experience of the 2008 financial crisis, shouldn’t such a scenario actually be avoided?
Instead, a major bank has to be rescued again, the managers of which have had high salaries and bonuses paid out for years. The Schweizer Tages-Anzeiger calculated that the top managers at Credit Suisse have received around 32 billion Swiss francs in bonuses since 2013, while the bank has made a loss of 3.2 billion francs in the same period (one franc is about 1 euro). . There has been a loss on the balance sheet five times in the past ten years.
After all, for 2022 the top floor of Credit Suisse had not paid out any bonuses for the time being, as the Neue Züricher Zeitung (NZZ) reports. In view of a particularly severe net annual loss of 7.3 billion francs, there were apparently too few arguments for a success fee. But even without bonuses, according to the NZZ, salary of 32.2 million francs flowed into the accounts of the bank management, only six million less than in the previous year.
There was still excitement about possible bonus payments on Monday: According to the Bloomberg news agency, Credit Suisse said in an internal letter that despite the takeover, all bonus and salary payments would be made as planned on March 24th. The Swiss finance minister Karin Keller-Sutter, on the other hand, assumes that the financial market supervisory authority will promptly issue a ban on bonuses, at least for management.
However, one wonders why the Credit Suisse bankers have been able to post such lavish bonuses in the past few years. Because even apart from the sober numbers, the bank has not exactly excelled with top management services. Quite the opposite: Credit Suisse and the managers responsible were embroiled in one scandal after the next:
All of these scandals came at a price. According to the Swiss broadcaster SRF, no other bank has had to pay as many fines, settlements and damages as Credit Suisse since the financial crisis. In the past ten years, around twelve billion Swiss francs have been paid in fines. How much credibility and trust the bank lost in the process can hardly be expressed in numbers. In any case, the collapse of Credit Suisse cannot be blamed solely on external factors such as the turnaround in interest rates.
According to some, Swiss politicians and financial authorities have stood by and watched the activities of the bank for too long. Others argue that even stricter regulation of banks ultimately cannot offer absolute security against mismanagement and its consequences.
