The stock market and SP are both worried Bill in the billions for taxpayers or investors?
A drumbeat from St. Gallen shakes up the CS rescue: the Federal Administrative Court declares the write-down of the AT1 bonds to be unlawful. Now there is a threat of a dispute worth billions between the federal government and UBS.
No time? blue News summarizes for you
- The Federal Administrative Court has ruled that the compulsory write-down of Credit Suisse's AT1 bonds was unlawful because Finma lacked the legal basis.
- If the ruling stands, there is a threat of a dispute worth billions between UBS and the federal government.
- After the decision was announced, the UBS share price briefly fell by around three percent.
- The SP warns that taxpayers could end up paying for the risks of the CS rescue.
The e-mail from the Federal Administrative Court, which was sent out at 12.14 p.m. on Tuesday, had it all: the compulsory write-down of Credit Suisse's so-called "AT1 bonds" was unlawful. According to the court, the Financial Market Authority (Finma) did not have a sufficient legal basis for this step.
The ruling is not yet legally binding. On Wednesday, FINMA announced that it would appeal the decision to the Federal Supreme Court. If the court confirms the ruling, the question will arise as to who will ultimately pay for the losses - UBS or the federal government. Investors lost a total of CHF 16.5 billion on these high-risk securities (AT1 bonds) in the course of the forced merger of Credit Suisse and UBS.
The decision is a stage victory for the approximately 3,000 complainants in over 360 proceedings. However, UBS and the Department of Finance are likely to be less pleased: if the Federal Supreme Court confirms the decision, there is the threat of a dispute between the Swiss Confederation and the big bank worth billions.
Share price falls by up to three percent
Investors reacted quickly on the stock market: a few minutes after the ruling was published, the UBS share price fell slightly, dropping by around three percent to its low for the day. It was noticeable that the share price had already fallen in pre-market trading.
Several blue News readers suspected that the decision may have been known before the official publication. Neither UBS nor Finma wanted to comment on the share price development. Finma merely stated in general terms that "information external to the company" could be considered insider information if it had a "significant" impact on the share price.
However, experts consider the fall in the share price to be insignificant: the decision had already been made on October 1 and could therefore have been exploited earlier with insider trading. In addition, the losses on the stock exchange were low - a possible sign that major investors have so far reacted calmly.
Critics on the left react with concern
The Social Democrats are different: SP spokesman Nicolas Haesler recalled on request that his party had warned of the financial risks of the CS bankruptcy at an early stage. "The Federal Council handed over CS to UBS at a bargain price - the risks were borne by the population and UBS was spared. We have always said that taxpayers are facing a bill in the billions. The decision of the Federal Administrative Court is correspondingly worrying," said Haesler.
The SP announced that it would "closely examine the ruling and the reactions of those involved". It reiterated its call for clear rules so that taxpayers do not have to foot the bill for the "risks of the new monster bank UBS".
Note: Following the publication of the article, Finma announced that it intended to appeal the decision to the Federal Supreme Court. This new development was added in the second paragraph.
