Credit Suisse has paid back government-backed liquidity

On March 19 it was announced that ailing Swiss bank Credit Suisse would be taken over by its rival UBS after a frantic last-ditch deal. © Keystone / Peter Klaunzer

Credit Suisse has repaid the liquidity it borrowed from a CHF100 billion ($112.5 billion) lifeline backed by government guarantees, Swiss Finance Minister Karin Keller-Sutter said in an interview broadcast on Wednesday.

“The federal guarantees, the CHF100 billion, have been repaid as of yesterday [Tuesday],” Keller-Sutter told Swiss public broadcaster SRF.

As part of its state-orchestrated rescue and takeover by rival bank UBS, Credit Suisse was given access to CHF200 billion in liquidity support, CHF100 billion of which was backed by the government.

In its quarterly results published in April, Credit Suisse said “the net amount of borrowings under these facilities amounted to CHF108 billion”.

The finance ministry later clarified to SRF that the maximum government-backed sum of CHF100 billion had not been fully used up, but that the liquidity aid backed by the government had been repaid in full.

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On March 19 it was announced that ailing Swiss bank Credit Suisse would be taken over by its rival UBS after a frantic last-ditch deal to prevent a catastrophic banking collapse.

UBS agreed to buy Credit Suisse for CHF3 billion ($3.4 billion) in stock and to assume up to CHF5 billion in losses that would stem from winding down part of the business, in a shotgun merger engineered by Swiss authorities over a weekend amid global banking turmoil.

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The deal, the first rescue of a global bank since the 2008 financial crisis, will create a wealth manager with more than $5 trillion in invested assets and over 120,000 employees globally.

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Speaking to Swiss newspaper Tages-Anzeiger last week, the Swiss finance minister appeared to refer to Credit Suisse directors and executives as “arsonists”. When asked whether politicians bore some responsibility for Credit Suisse’s downfall, she said: “You have to be careful not to confuse firefighters and arsonists. The board of directors and executive board are responsible for Credit Suisse — and not the government.”