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Papers warn on UBS takeover of Credit Suisse

UBS bank
UBS doesn't want to get rid of Credit Suisse's Swiss operations, writes a Sunday newspaper. © Keystone / Michael Buholzer

The size of the new UBS bank after its government-backed takeover of troubled Credit Suisse is disproportionate to that of Switzerland, warns Sunday newspaper Le Matin Dimanche.

Deposits of UBS savers that could be quickly withdrawn exceed CHF750 billion ($815 billion), which is almost the wealth produced each year in Switzerland, writes the paper. A UBS bankruptcy would plunge the country into recession. “There should be no doubt about the solvency of UBS,” Jean-Pierre Danthine, former vice-president of the Swiss National Bank, tells the paper. He recommends strengthening the supervision of banks.

“Super-bank inspires angst” is the headline in the SonntagsBlick. While many politicians and experts are calling for the Swiss entity of Credit Suisse to be separated from the group and given autonomy, UBS wants to keep it, writes the paper. “A lot of what’s been said is electoral propaganda by politicians who have no idea about banking activities,” a senior UBS executive tells SonntagsBlick.

+ Read why a monster UBS bank scares Switzerland

Two out of three Swiss reject the takeover of Credit Suisse by UBS, according to a new survey by the Sotomo Institute also reported by SonntagsBlick. As in the gfs.berne survey published on Friday, 61% of them would have preferred the state to nationalise Credit Suisse and sell it later. Four out of five respondents want UBS to spin off Credit Suisse’s Swiss operations to avoid too much risk concentration. The Swiss are more likely to direct their anger at Credit Suisse and its managers than at possible political or regulatory failures, the survey also found. Seventy-seven percent denounced the behaviour of Credit Suisse management.

And the Sonntagszeitung says potential fines of billions of francs hanging over Credit Suisse influenced the knockdown purchase price for the UBS takeover. A rapid resolution of outstanding cases by UBS will bring it more costs, although tax experts tell the paper it may be able to write some old Credit Suisse losses off against future profits.

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