With reverberations from the ongoing banking crisis continuing to be felt across the Western financial system, Swiss officials say they need to double-check the paperwork as their country’s biggest bank attempts a takeover of its struggling rival.
Switzerland has opened an investigation into the takeover of the beleaguered Credit Suisse bank by its rival UBS Group, authorities announced Sunday.
The nation’s Federal Prosecutor said in a statement that the office is looking into whether executives at either Credit Suisse and UBS committed crimes, but didn’t elaborate about the direction of the investigation.
"The Office of the Attorney General wants to proactively fulfill its mandate and responsibility to contribute to a clean Swiss financial center and has set up a monitoring system so that it can take action immediately on any issues that fall within its area of responsibility," the prosecutor's office stated.
The central bank said that if the investigation turned up any serious irregularities, investors' deposits would be guaranteed.
UBS, which reappointed former CEO Sergio Ermotti ahead of the mergers, reportedly insists that its "number one priority is to stabilize the situation".
The chairman of the board of directors of the new super-bank described the merger as not only "the biggest transaction" since the 2008 financial crisis, but "the first time" that banks of global significance will combine forces.
Credit Suisse agreed to a merger with UBS in March just one week after getting a $54 billion bailout by the Swiss government which failed to stem a massive drop in share prices – a bailout which indicated that the bank had been deemed "too big to fail." Though it’d been on a steady slide for years, Credit Suisse’s shares have plummeted in value by four times in as many months since December.
With the walls closing in, the embattled company’s investors decided in March to be absorbed by their rival UBS for $3.25 billion in a government-supervised deal.
UBS, the country’s largest bank, has declared that it could end up laying off up to 30% of its workforce in the wake of the buyout. In a worst-case scenario, that could mean that as many as 36,000 people lose their jobs.
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