Too big to manage. That must be the feeling that winds its way through the Swiss cantons after that ubs had to buy the Credit Suisse in difficulty. The solution then could be the stew: one spinoff able to divide the good from the bad, the profitable from the ballast.
After taking over the neighboring main square of Zurich, UBS would become a bank that performs twice as much as the GDP of the whole of Switzerland, with assets under management that will be worth six times more than the entire national economy. Hence the fear that such a large group could be too difficult to manage and destroy competition within the Confederation.
From a survey, most want Credit Suisse's spin-off
And immediately a survey organized by the local newspaper Sonntagsblick was triggered, according to which 62% of the 7400 participants believe that it would be more appropriate if Credit Suisse were spun off from UBS.
The purchase of Credit Suisse by UBS, which itself had been greatly helped to recover in 2008, was decided in a hurry by the government and the Swiss central bank during a stormy Sunday March 19 to avoid triggering a wider financial crisis. Not everyone liked the move. But even the idea of the spinoff is not easy to organize: “It's not on the table for now” hastened to say the head of the Swiss National Bank Thomas Jordan.
The creation of a bad bank for foreign investors
The idea, not really new, is to channel most of the performing assets that Credit Suisse holds in Switzerland to UBS, then creating a bad banks for activities such as high risk to be allocated to foreign operators. A hypothesis on which the market is also betting today: "a takeover by Credit Suisse is the most probable scenario", write the analysts of jp morgan.
Last year too there was talk of it, while negotiations were underway with the new Middle Eastern shareholders as part of the 4 billion recapitalization launched in the autumn. However, the project never took off. Again in January the president of Ubs Colm Kelleher he had publicly denied the group's interest in the operation. But the crisis of the last few days would, however, have given a strong acceleration to the dossier.
Especially since, given the gigantism of which Ubs is now affected, it is difficult for the antitrust authority could accept the formation of such a large economic power in the hands of a single company and a spin off of a part of the business could be welcome. Furthermore such an operation would have the function of preserve stability and the integrity of the national banking system, as well as of protect employment, considering that in Switzerland Credit Suisse employs around 16 people.
