UBS ends taxpayer backstop granted for Credit Suisse rescue
www.reuters.com
Swiss taxpayers are no longer on the hook over the rescue of Credit Suisse after UBS said on Friday it would not need the 9 billion francs ($10.3 billion) of state guarantees provided to smooth the takeover of its failing rival.
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    1 year ago

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    “These measures, which were created under emergency law to preserve financial stability, will thus cease to exist, and the Confederation and taxpayers will no longer bear any risks arising from these guarantees,” the Swiss government said.

    UBS also said on Friday that Credit Suisse had fully repaid an Emergency Liquidity Assistance Plus (ELA+) loan of 50 billion francs to the SNB.

    But it decided against ending the agreement giving it access to these funds as a precautionary measure, making it possible for the bank to re-access the liquidity lifeline in the future if needed.

    “The early voluntary repayment could potentially also help in other matters, such as negotiating the retention of the Credit Suisse Swiss business, in our view,” Citi analyst Andrew Coombs said.

    As of July, a 43 billion franc emergency liquidity assistance loan with the central bank remained outstanding, a person familiar with the matter said.

    UBS’s chief executive and chairman on Friday told staff in a memo seen by Reuters that it would provide information on further milestones it had reached in the merger with Credit Suisse alongside its second-quarter results on Aug. 31.

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