Swiss prosecutors say investigating UBS-Credit Suisse merger

Swiss prosecutors say investigating UBS-Credit Suisse merger

Credit Suisse had been embroiled in a series of scandals before the UBS takeover
Credit Suisse had been embroiled in a series of scandals before the UBS takeover. Photo: Fabrice COFFRINI / AFP/File
Source: AFP

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Swiss federal prosecutors said Sunday that they had begun investigating the UBS takeover of its embattled banking rival Credit Suisse.

In an email to AFP, prosecutors said they issued orders to investigate after "taking stock of the situation with all the relevant internal services" and contacting national and local authorities.

The probe will aim to ensure Switzerland's financial centre remains "clean" and identify any criminal offence lying within their remit, they added.

A "surveillance system" has been put in place that will allow them to intervene if necessary, the public ministry said.

The prosecutors said they wanted to "have an overall view of the many aspects" of the events relating to Credit Suisse, including those reported in the media, and to "secure and assess the available information".

"Different internal and external bodies have been mandated or contacted with the aim of clarifying and gathering information," they added.

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The statement confirmed a report by the Financial Times.

Switzerland's largest bank agreed to absorb its troubled main rival for $3.25 billion last month in an emergency deal supervised by the government, the Swiss central bank and the financial regulator.

Credit Suisse shares had tumbled after the collapse of some US regional banks sparked fears of a trans-Atlantic contagion across the sector and a financial meltdown.

Both UBS and Credit Suisse, Switzerland's second-biggest bank, are among a select group of lenders deemed "too big to fail" due to their importance to the global banking system.

Verbal assurances and a loan of 50 billion Swiss francs by the central bank shortly before the takeover were not enough to calm investor concerns.

Credit Suisse had been embroiled in a series of scandals before the share price collapse, getting caught up in the bankruptcy of the British financial company Greensill and the implosion of the US hedge fund Archegos.

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It was also embroiled in a bribery scandal in Mozambique involving loans to state-owned companies and was fined $2 million in a money laundering case linked to a Bulgarian cocaine network.

The scandals, a major restructuring plan that failed to convince all observers and a heavy loss in 2022 risked a bankruptcy and with it the reputation of Switzerland's banking sector.

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Source: AFP

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