Switzerland

Hundreds more Credit Suisse Group AG bondholders sued Switzerland’s banking regulator after their securities valued at about $1.7 billion were wiped out during the lender’s government-brokered takeover by UBS Group AG, Bloomberg News reported.

Credit Suisse Group earned solid marks for crisis preparedness as recently as last year, underscoring how quickly the plunge in confidence blindsided regulators and investors before the bank’s near collapse, Bloomberg News reported. “It is clear that there are important lessons to be learned from the Credit Suisse crisis for future crisis preparations,” Urban Angehrn, chief executive officer of Swiss financial markets regulator Swiss Financial Market Supervisory Authority (Finma), said in a statement on Wednesday (Apr 26). The regulator will “contribute to this objective”, he said.

UBS said on Tuesday it had set aside more money to draw a line under its involvement in toxic U.S. mortgages, halving its first-quarter profit as the bank girds itself for the "hard" task of swallowing fallen rival Credit Suisse, Reuters reported. Sergio Ermotti, brought back as UBS chief executive to steer the takeover, said it aims to close the deal with fellow Zurich-based bank Credit Suisse by May but warned that it could take four years for a full integration. "There is much to do and there will difficult decisions to be made in the coming months," he said during a call with analysts.

Credit Suisse Group AG gave a glimpse of its chaotic final weeks before a rescue last month by UBS Group AG in a first-quarter earnings report that showed operating revenue diving and customers rushing to pull deposits, the Wall Street Journal reported. The Swiss bank lost more than $2 billion from its businesses in the first quarter, but posted a prodigious net profit because of the paper gains realized from writing off $17 billion in bonds. Customers withdrew around $75 billion in deposits, in a run that the bank says has moderated since the UBS deal announcement on March 19.

Switzerland's UBS said on Monday it will retain Christian Bluhm as chief risk officer for the "foreseeable future" as it bolsters controls during the takeover of Credit Suisse, Reuters reported. Chief Executive Sergio Ermotti is reshaping the ranks of UBS as it works on integrating Credit Suisse, the 167-year-old Swiss banking rival which it rescued in March. UBS had said in November that Bluhm, who has been its risk chief since 2016, would step down to focus on his photography business. Damian Vogel, who currently overseas risk in its wealth management unit, was set to replace Bluhm in May.

Credit Suisse Group AG bondholders have launched a legal challenge in Switzerland against regulators’ decision to write down $17 billion in securities as part of UBS Group AG’s rescue of the troubled bank last month. Bondholders holding about 4.5 billion Swiss francs ($5 billion) of Credit Suisse’s canceled debt want the decision to write down their bonds revoked or amended, according to an outline of their appeal made in a Swiss administrative court and reviewed by the Wall Street Journal.

Swiss inflation may be low compared to other countries but is still too high, Swiss National Bank Vice Chairman Martin Schlegel said on Wednesday, hinting at possible further interest rates ahead, Reuters reported. "It is clearly above the level we associate with price stability," Schlegel told an event in Winterthur. "We cannot rule out further interest rate increases." Swiss inflation dipped to 2.9% in March from 3.4% in February, high by Swiss standards and above the SNB's target for inflation at 0-2% - which it defines as price stability.

Switzerland's parliament rejected on Wednesday the government's 109 billion Swiss francs ($120.82 billion) aid for Credit Suisse's merger with UBS, leaving the fallen bank's hastily arranged rescue without a largely symbolic parliamentary blessing, Reuters reported. While the upper house had approved the government's contribution to the rescue package, parliament's lower, and larger chamber, pushed back again on Wednesday. It had already rejected the proposals in a late night session on Tuesday, forcing the upper house to find a solution when it met again on Wednesday.

Switzerland’s lower house made a second symbolic vote against providing state guarantees for UBS Group AG’s takeover of Credit Suisse Group AG, reflecting a high degree of public discontent with the deal, Bloomberg News reported. The lower house voted against a compromise offered by the upper house, leading to a failure of the bill and ending parliamentary proceedings. Irrespective of the vote, parliament can’t stop the takeover negotiated last month. Lawmakers on Wednesday couldn’t agree on what restrictions should be imposed on large banks after the historic government-brokered takeover.

Swiss lawmakers blamed the government, regulators and the management for failures around the takeover of Credit Suisse Group AG last month, setting the stage for an election year in which thousands of jobs are at stake, Bloomberg News reported. Though the legislative doesn’t have the power to derail the takeover, the extraordinary parliamentary meeting scheduled for three days starting Tuesday, is forcing the government into continued defense of its actions during the unpopular emergency takeover by UBS Group AG announced on March 19.