ZURICH (Reuters) – A Swiss parliamentary inquiry is due to begin this week and establish the dysfunctions that preceded the fall of Credit Suisse, then Switzerland’s second largest bank.

This is the fifth investigation of this type in Switzerland, decided after the Parliament rejected by a symbolic vote the rescue plan of 109 billion Swiss francs (112 billion euros) put in place by the government to allow the takeover of Credit Suisse by UBS.

“We can’t pretend nothing happened, and this investigation reminds us of that,” said Peter V. Kunz, professor of business law at the University of Bern.

Here is what is known from the investigation and the gray areas that remain:


The 14-member commission will focus on the authorities’ actions before and during Credit Suisse’s emergency recovery.

It will examine the behavior of the Federal Council, the Ministry of Finance and other public bodies, such as the financial market regulator (Finma) and the Swiss National Bank.

The investigation is not a legal proceeding, but it could provide material to the lawsuits initiated after the collapse of Credit Suisse, if it uncovers new information.

Finma is notably being prosecuted for having ordered Credit Suisse to fully amortize its 16 billion Swiss francs of AT1 instruments, and by Credit Suisse shareholders dissatisfied with the ratio at which their Credit Suisse shares were exchanged for UBS shares.


A crucial question will be whether Finma, the Ministry of Finance and the central bank should have intervened earlier.

Credit Suisse’s difficulties had been evident for two years.

What did the authorities know? What did the bank tell the regulator and what did it share with the government?

Could the central bank have done more, for example by promising Credit Suisse unlimited liquidity to reassure customers and stem the outflow of funds?


The commission of inquiry should summarize its findings in a report, making recommendations to the government and parliament, and possibly suggesting specific solutions.

It is unlikely to dwell on technical recommendations, such as capital ratios, but it will focus on how to make Finma more efficient, for example by giving it greater powers.

She could also consider giving the central bank more powers to supervise the big banks, especially since UBS now has a balance sheet twice the size of the Swiss economy.

Since the Commission cannot write new laws, any changes will have to go through Parliament.


The commission of inquiry is Parliament’s most powerful tool. She will have access to the minutes of government meetings and other confidential information, and people working for the government, the federal administration, the regulator or the central bank will have to attend her hearings.

The leaders of Credit Suisse and UBS could be in fact obliged to appear at these hearings as the political and public pressure which will be exerted on them will be strong.

The commission said it could not comment on the people who appeared before it until it had completed its work.


The commission has 5 million francs to set up its office, remunerate its members and hire outside experts and consultants.

The investigation is expected to last between 12 and 18 months and the commission is expected to meet every two weeks.

Its meetings will be held behind closed doors and there are no plans to open them to the public or broadcast the proceedings.

The individual recommendations and the final report will be approved by majority vote and the report will then be presented to both Houses of Parliament and then to the government.


The commission will be chaired by Isabelle Chassot, member of the upper house of the Swiss parliament, member of the centrist party Mitte. His deputy is Franziska Ryser, a member of the Greens party in the lower house.

The centrists, the Center Democratic Union and the liberal FDP party each have three members. The Social Democrats and the Greens have two and the Green-Liberal Party one.

All criticized the management of the crisis by the authorities, calling for a strengthening of financial supervision and worrying about the domination of UBS on the Swiss market by UBS.


Some experts believe that the investigation offers the Swiss authorities an opportunity to redeem themselves, but others see it as political posturing.

(Report John Revill, Tomasz Janowski, Corentin Chapron, edited by Kate Entringer)

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