The major parties in the Swiss Parliament largely agree the combined UBS is too big. But thwarting the merger by political means is difficult.
The Swiss National Council and the Council of States are debating the emergency rescue of Credit Suisse in a special session starting today and running through Thursday. A hot topic is the domination of the Swiss banking industry by a single major bank that could develop concentrated market power in certain industry segments.
The FDP wants to ensure the new megabank is reduced in size, with SVP National Councilor and banker Thomas Matter singing from the same song sheet. There should no longer be a single Swiss bank whose bankruptcy is so systemically important that it has to be rescued by the state or taxpayers.
Waiting for the Weko
The demands of the centrist party are somewhat less stringent. According to its parliamentary group leader Philipp Matthias Bregy, it does not want to stop the takeover of Credit Suisse by UBS. First, however, there must be a financial strategy and questions of competition law must be clarified by the Competition Commission (Weko).
Then UBS would be free to decide whether to submit to the stricter regulation for big banks or to downsize.
Rising Clamor
Amid all the clamor, it seems to be forgotten the parliament cannot thwart the merger of UBS and Credit Suisse.
Before the takeover is finally approved, the hands of the politicians are tied. The authorities, for their part, have already approved the merger under emergency law, which can only be applied for six months.
Political Tug-of-War
It is entirely up to UBS whether it integrates Credit Suisse completely, spins off part of it, targets an IPO, or takes any other decision regarding the future of the defunct Credit Suisse.
However, there could still be a political tug-of-war after the merger goes through, as finews.com reported.
