Swiss government orders freeze on Credit Suisse bonus payments
The Swiss government is ordering Credit Suisse to temporarily suspend certain forms of variable remuneration for its employees after the bank’s collapse and takeover by bigger rival UBS.
This relates to already granted but deferred remuneration for the financial years up to 2022, for example in the form of share awards, according to a government statement on TuesdayExternal link. It has also asked the finance ministry to propose further measures on variable remuneration for the financial years up to 2022 and thereafter.
Switzerland’s Banking Act stipulates that the government “shall impose remuneration-related measures if a systemically important bank is directly or indirectly granted state aid from federal funds,” says the statement.
Last week a CHF50 billion ($54 billion) liquidity backstop from the Swiss National Bank (SNB) failed to stop a crisis of confidence in already troubled Credit Suisse.
A weekend of high drama ended with UBS agreeing to buy Credit Suisse for CHF3 billion, well-below its closing share price on Friday.
The Swiss central bank will smooth the transaction by providing CHF100 billion in liquidity to UBS and Credit Suisse during the takeover. The government has agreed to absorb up to CHF9 billion of potential UBS losses.
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