The Swiss large investment bank (IB) UBS is set to be scrutinized by the Swiss Federal Assembly in a hearing scheduled for May to examine whether the process of acquiring Credit Suisse (CS) was appropriate.
According to the Swiss Federal Assembly on the 27th (local time), the joint committee of the Federal Council and National Council will hold meetings on May 8-9 and 15-16 to discuss the issue of UBS's acquisition of CS.
The meetings will be conducted in the form of hearings, with witnesses expected to include Karin Keller-Sutter, Minister of Justice from the Swiss Federal Government, Marlene Amstad, Head of the Financial Market Supervisory Authority, and Thomas Jordan, President of the Swiss National Bank (SNB).
The Assembly plans to examine whether financial supervisory policies functioned properly during the process in which CS fell into a financial crisis, and also to verify whether there were any issues with UBS's acquisition of CS.
Previously, CS was engulfed in a management crisis due to investment failures and customer withdrawals, and was acquired by UBS on the 19th. The CS crisis sparked fears of a financial crisis not only in Switzerland but across Europe, prompting the Swiss Federal Government to actively intervene in the acquisition process.
The government promised liquidity support amounting to 100 billion Swiss francs (approximately 141 trillion won) during the acquisition process, and also agreed to guarantee 9 billion Swiss francs (about 12.7 trillion won) of potential losses arising from the assets acquired by UBS.
The Assembly is expected to focus on thoroughly examining whether the government's provision of liquidity support followed by guarantees for losses was lawful, and whether sufficient alternatives to the acquisition were considered.
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