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.
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Switzerland
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.
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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.
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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.
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UBS's multi-billion state-sponsored takeover of Credit Suisse should proceed smoothly without political obstructions, Swiss Finance Minister Karin Keller-Sutter said in an interview published on Saturday, Reuters reported. The Swiss parliament is due to hold an extraordinary session this week to discuss the emergency merger engineered by the Swiss authorities after Credit Suisse came close to collapse.
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UBS faces big risks as it prepares to absorb its longtime archrival, Credit Suisse, the bank’s chairman warned shareholders at its annual meeting on Wednesday, the New York Times reported.
Switzerland’s banking regulator said it considered putting Credit Suisse Group AG into bankruptcy before deciding on the takeover by UBS Group AG, as the risk of contagion was too great, Bloomberg reported. Finma scoped out various rescue options before the day the bank was sold in the government-backed deal. The lender had faced an “unprecedented” bank run, Finma President Marlene Amstad said at a press conference on Wednesday in the Swiss capital Bern.
Credit Suisse shareholders on Tuesday upbraided the Swiss bank’s leaders for years of mismanagement, scandal and obfuscation that sent its stock price into the gutter, while executives apologized and insisted that the only way forward for the once-venerable lender was a government-engineered takeover by rival UBS, the Associated Press reported.
Sight deposits held by the Swiss National Bank declined last week, data showed on Monday, suggesting that Credit Suisse and UBS may have cut back on use of emergency funds that had been offered to them to facilitate their planned merger, Reuters reported. Total sight deposits — meaning commercial bank cash held by the central bank overnight — fell to 563.566 billion Swiss francs ($614.71 billion) from 567.003 billion francs in the previous week, the SNB data showed.
A poll of Swiss economists found that nearly half think the takeover of Credit Suisse by UBS was not the best solution, warning that the saga has dented Switzerland’s reputation as a banking centre, Reuters reported. Switzerland's KOF economic research institute found that 48% of the 167 university economists it questioned would have preferred a state takeover and possible later sale of Credit Suisse.