Geneva: Fury at top against Credit Suisse managers. Lament over damage to Switzerland’s image as a stable, reliable banking centre. Relief that authorities stepped in to help protect deposits, but worry about keeping cash invested in a bank that failed to manage its own money adequately.
On Swiss streets, emotions were running the gamut among Credit Suisse customers after the government this weekend orchestrated a takeover of the country’s second-largest bank by rival UBS – a bid to prevent further upheaval in the global financial system that began with the collapse of two US Banks.
How the merger, with a fire-sale price of 3 billion Swiss francs ($3.25 billion), will play out and its impact on worldwide finance is largely unknown. That has left those stuck in the middle – customers and bank workers – uncertain about what comes next in the deal to create one Swiss megabank.
“My money is already invested in two or three banking establishments,” customer Elisabeth Pictet said after exiting the biggest Credit Suisse branch in central Geneva. “I am not a millionaire, but it is true that in the long run maybe I will even more favour local, regional banking establishments,” she added.
Pictet – whose husband hails from a legendary banking family in Switzerland – said she’s not gotten any communication from the bank about how to proceed but praised the government for a ‘wise decision’ that reassured many Swiss residents like her. She said Tuesday that she’s had no trouble withdrawing cash.
“I feel a lot of anger at Credit Suisse managers because in the end, their employees will lose their jobs – many employees who did their work professionally,” said Pictet, 59, who is transitioning into retirement from a health care job.
Asked if Credit Suisse had told customers how to manage their assets since the deal emerged Sunday, a bank spokeswoman said that ‘until the transaction has closed, business continues as usual for Credit Suisse and its clients’.”
That likely won’t be the case for Credit Suisse’s 50,000 workers, 17,000 of whom are in Switzerland, as the two banks combine. The Swiss bank employees’ association is demanding that job losses be held to a minimum, that no lay-offs happen until year’s end, and the Swiss government provides an unspecified jobs guarantee.
“It is impermissible that the companies are secured by tax dollars but the employees come away with nothing,” the group said in a prepared statement. “The billions in guarantees from the federal government must be linked to conditions favourable to the employees.”
The impact of the merger is extensive. Many of Switzerland’s 8.5 million people have accounts in either UBS or Credit Suisse.
“I myself am grateful as a customer that this worked out,” said Finance Minister Karin Keller-Sutter at a news conference Tuesday to announce the hastily arranged deal.
Keller-Sutter said she has accounts at both banks. “I think what we have done now is really to protect those people who have money at Credit Suisse,” Keller-Sutter said, with small-and medium-size companies able to keep paying their workers, carry out transactions and access their savings.
Octavio Marenzi, CEO of consulting firm Opimas LLC, agreed that Credit Suisse depositors need not worry about their money now — though he noted reports of snap withdrawals worth billions of dollars last week amid confusion about the bank’s future.