Switzerland’s largest party said it was against a state guarantee for Credit Suisse Group AG, signaling increasing hurdles for additional support for the lender.
(Bloomberg) — Switzerland’s largest party said it was against a state guarantee for Credit Suisse Group AG, signaling increasing hurdles for additional support for the lender.
“The government shouldn’t give Credit Suisse a state guarantee,” Thomas Matter, a member of the right-wing Swiss People’s Party’s leadership team said on Thursday. “The Swiss National Bank was responsible for providing liquidity to Credit Suisse, and the SNB has acted.”
That contrasts somewhat with the second-largest party. A spokesman for the Social Democrats said they wouldn’t oppose a state guarantee, still if such a guarantee were formalized “it would have to be well compensated.”
Both parties have two seats each on the seven-member Federal Council, which forms Switzerland’s government. The body usually takes decisions by consensus. Still, it’s possible that a consensus is formed outside of party lines.
Swiss media reported on Thursday that the Federal Council was meeting for an unscheduled session to discuss the crisis. The government declined to comment.
If the government gave a guarantee to Credit Suisse, that would make the Swiss ‘Too Big to Fail’ regulation not credible, SVP’s Matter said. After the financial crisis, the country introduced laws which provide for a break-up and a controlled wind-down for an ailing bank.
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