The president of the bank Credit Suisse, Axel LehmanHE excused this Tuesday before the shareholders behind the forced sale of the entity to UBS to avoid his bankruptcy last month, and assured that the bank could not be saved so the fusion it had to be carried out.
“I apologize that we have not been able to stop the loss of confidence that accumulated over several years and for having upset“, said the executive at the opening of the last annual meeting of the bank, after 167 years of history.
After years of scandals and bad financial betsthe bank could not resist the loss of confidenceaccentuated by the global banking turmoil of the last weeks. And, after arduous negotiations, which included the management of the Swiss government, the bank was sold to its competitor UBS by US$3.250 millionon March 19.
The objective of the regulatory authorities was avoid a collapse which threatened to produce a systemic effect in the rest of the financial system, as it was one of the banks with the most interconnections in the world.
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The shareholders showed up outraged during the assembly after seeing how their investments evaporated with the sale of the bank and not having been consulted by the merger, something that must be done in this type of operation but that the urgency prevented.
“I lost $11,000. For my family it is a lot of money,” a shareholder told Agence France Presse at the entrance to the assembly where there was a police presence to prevent overflows.
The board of directors defended the decision to sell to UBS and considered that it was only possible option. In this sense, Lehmann justified -in statements disseminated by the DPA and Bloomberg news agencies- that “the bank could not be saved. Ultimately there were only two options: a settlement or bankruptcy. The merger had to take place”.
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The second option “would have led to worst case scenario” with a “total loss for shareholders, unpredictable risks for clients and serious consequences for the world economy and markets.
Lehmann affirmed that he believed in his plans to restructure the entity until what he called the “fateful week of March” where the combination of interest rate hikes, inflation and the market volatility made the entity particularly vulnerable.
He assured that together with UBS are “committed” to find the best possible solutions for employees and “reduce this time of uncertainty as much as possible”.
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“We ran out of time. This fills me with sadness,” said the CEO, Ulrich Körnerwho pointed out that the runs suffered by the bank since the end of last year were the result of “rumors and unfounded speculation”.
Körner stated that the situation led to “act quickly and decisively”and assured that the collapse “would have been catastrophic not only for Swiss but for the world economy.
The vice president of Swiss National Bank -the central bank of that country-, martin schlegelHe affirmed, in the same sense as the directors of the bank, that it was the only way out. Without the purchase of UBS“it was very, very possible that a financial crisis in Switzerland and the rest of the world would have happened,” he said Monday in television statements.
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The balance of the latest tensions in the banks also left in USA the fall of Silicon Valley Bank (SVB) and the SignatureBank.
As stated this Tuesday in a letter to shareholders the CEO of JPMorgan, Jamie Dimondthe effects “are not over yet” and “they will feel for years”. He considered that the turbulence was due, among other reasons, to the absence of stress tests about the effects that a rise in interest rates would bring.
For her part, the secretary of the Treasure, Janet Yellendeclared on Monday that the banking situation is “stabilizing” with a drop in outflow of deposits that impacted small and medium banks.
Source: Ambito
