Swiss prosecutors probe takeover of Credit Suisse by rival UBS

Swiss authorities have launched an investigation into the emergency takeover of Credit Suisse for £2.6 billion by competitor UBS.

The federal prosecutor’s office is investigating possible criminal violations by government officials, regulators and executives at the two banks. UBS and Credit Suisse reached the deal two weeks ago during a hectic weekend.

It was feared that without a bailout, Credit Suisse would implode, possibly leading to a collapse of the wider global banking sector.

The prosecutor’s office said yesterday that there were “many aspects of the events surrounding Credit Suisse” that warranted investigation and that they should be analyzed to “identify offenses that could fall within the jurisdiction of the prosecutor’s office.” [prosecutor]’.

“The Attorney General’s office is committed to proactively fulfilling its mandate and responsibility to contribute to a clean Swiss financial center and has established a monitoring system so that it can take immediate action on issues within its area of ​​responsibility,” the statement said. statement said.

It was not specified which specific aspects of the acquisition would be investigated or how long the investigation might take.

Both UBS and Credit Suisse declined to comment.

Last month’s deal came as Credit Suisse was about to falter. The perpetually troubled lender was already fighting to recover after a £99bn exodus of funds late last year helped it rack up an annual loss of £6.5bn. It suffered another surge following the collapse of a string of US lenders, including Silicon Valley Bank.

When its largest shareholder, Saudi National Bank, announced that he would not invest any more money, his share price fell further sharply.

That led to the so-called “shotgun marriage” with UBS, orchestrated by the Swiss government, the central bank and financial regulators.

Some observers believe the deal will prove to be a huge success for the buyer as it acquires its old rival at a bargain price. Things are likely to be less fortunate for many of the combined group’s 120,000 employees – 11,000 of them in the UK.

Reports in Switzerland over the weekend suggested it will shed up to 30 per cent of jobs – which could translate to thousands in London, although there are no details yet on where the ax will fall.

Probe: The prosecutor’s office said there were “numerous aspects of events surrounding Credit Suisse” that warranted investigation

A survey of Swiss economists found that 48 percent would have preferred a state takeover and possible subsequent sale of Credit Suisse, while only 19 percent saw the UBS deal as the best option.

The sheer size of the new institution, which will have £1.3 trillion in assets, is of concern, as is the size of the £230 billion liquidity support and guarantees being offered by the Swiss government and the country’s central bank .

Shareholders will have a chance to air their grievances about the acquisition when both banks hold their annual general meetings this week.