Investors in Asia are joining international lawsuits against the Swiss government for its handling of affairs during the takeover of Credt Suisse, the iconic but troubled bank. Authorities in Switzerland forced Credit Suisse to merge with rival UBS to prevent own collapse.

Though the takeover averted a catastrophe in Swiss banking system, it made bonds worth USD 17 billion held by investors worthless.

An anonymous investor quoted by BBC had bought USD 500000 worth of bonds in January. The investor took the decision even after several problems in the bank.

"Whenever I spoke to them, the bank gave me constant reassurances that this was just a blip, so I decided to go for it. It didn't feel like I was gambling," BBC quoted the investor as saying.

The type of bonds bought in this case were reportedly AT1, a riskier type of bond the value of which can be written down to zero. This is something that happened when Credit Suisse was taken over by UBS.

Now, dozens of bondholders in Singapore are joining hands to hold the Swiss government responsible. The main grievance is the manner in which the merger was conducted.

The investors reportedly claim that terms of bonds should have made them first to be compensated when the bank was on the brink of collapse. The bondholders were to be given priority over shareholders. However, shareholders were allowed to exchange their Credit Suisse shares with UBS shares.

This in effect means that shareholders got something but bondholders did not.

The legal firm, which is representing bondholders, has alleged that the Swiss regulator's decision was "an unlawful action" and that it had "devastating consequences on thousands of retail and small investors globally."

Bondholders who talked to BBC expressed frustration after losing their money and&nbsp;questioned Switzerland's banking reputation.

"We're losing sleep over this. It should have been a rock solid investment, but now I think the reputation of Switzerland and Swiss banks has gone down the tube," said an Asian investor quoted anonymously by BBC.

"Who in the world is going to trust Switzerland anymore?"

(With inputs from agencies) 
 
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Investors in Asia are joining international lawsuits against the Swiss government for its handling of affairs during the takeover of Credt Suisse, the iconic but troubled bank.

Investors in Asia are joining international lawsuits against the Swiss government for its handling of affairs during the takeover of Credt Suisse, the iconic but troubled bank. Authorities in Switzerland forced Credit Suisse to merge with rival UBS to prevent own collapse. Though the takeover averted a catastrophe in Swiss banking system, it made bonds worth USD 17 billion held by investors worthless. An anonymous investor quoted by BBC had bought USD 500000 worth of bonds in January. The investor took the decision even after several problems in the bank. "Whenever I spoke to them, the bank gave me constant reassurances that this was just a blip, so I decided to go for it. It didn't feel like I was gambling," BBC quoted the investor as saying. The type of bonds bought in this case were reportedly AT1, a riskier type of bond the value of which can be written down to zero. This is something that happened when Credit Suisse was taken over by UBS. Now, dozens of bondholders in Singapore are joining hands to hold the Swiss government responsible. The main grievance is the manner in which the merger was conducted. The investors reportedly claim that terms of bonds should have made them first to be compensated when the bank was on the brink of collapse. The bondholders were to be given priority over shareholders. However, shareholders were allowed to exchange their Credit Suisse shares with UBS shares. This in effect means that shareholders got something but bondholders did not. The legal firm, which is representing bondholders, has alleged that the Swiss regulator's decision was "an unlawful action" and that it had "devastating consequences on thousands of retail and small investors globally." Bondholders who talked to BBC expressed frustration after losing their money and questioned Switzerland's banking reputation. "We're losing sleep over this. It should have been a rock solid investment, but now I think the reputation of Switzerland and Swiss banks has gone down the tube," said an Asian investor quoted anonymously by BBC. "Who in the world is going to trust Switzerland anymore?" (With inputs from agencies) You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Credit Suisse: Bondholders in Asia sue Swiss government after wipeout

UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse.

Ermotti, who was the bank's top executive for nine years and led a turnaround following the 2008 global financial crisis, will take over next Wednesday from CEO Ralph Hamers.

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Hamers took up the job in November 2020 and will remain at UBS during a transition period "to ensure a successful closure of the transaction and a smooth handover," the bank said in a statement.

UBS credited Ermotti, who is now chairman of insurer Swiss Re, for having "cut its footprint" and changing the culture of the bank&nbsp;and it pointed to his experience in bringing big financial institutions together.

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The hastily arranged, USD 3.25 billion deal for Credit Suisse aimed to stem the upheaval in the global financial system after the collapse of two US banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland's second-largest bank to tank and customers to pull out their money.

Swiss authorities urged UBS to take over its smaller rival after the central bank's plan for Credit Suisse to borrow up to 50 billion francs (USD 54 billion) failed to reassure investors and customers. The Swiss executive branch passed emergency measures to bypass shareholder approval.

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UBS Chairman Colm Kelleher said Wednesday that he called Ermotti shortly after the emergency deal was arranged on March 19, which involved Swiss regulators, the federal government and top executives at both banks.

"This is the biggest single financial transaction since 2008. That brings significant execution risk," Kelleher said on a conference call.

Swiss lawmakers and academics have raised concerns that the deal could create an unwieldy Swiss banking behemoth, while UBS executives said regulatory issues loom internationally before the deal can close.

Many Credit Suisse customers have expressed regret at the looming disappearance of a 167-year-old bank that has been a pillar of Switzerland's renowned banking and financial industry. 
 
(With inputs from agencies) 
 
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UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse.

UBS said Wednesday that it's bringing back former CEO Sergio Ermotti to lead the Swiss bank as it moves forward with a government-orchestrated plan to take over struggling rival Credit Suisse. Ermotti, who was the bank's top executive for nine years and led a turnaround following the 2008 global financial crisis, will take over next Wednesday from CEO Ralph Hamers. Also Read | Marriage a license to rape? India's top court to hear pleas on marital rape; these countries criminalise it Hamers took up the job in November 2020 and will remain at UBS during a transition period "to ensure a successful closure of the transaction and a smooth handover," the bank said in a statement. UBS credited Ermotti, who is now chairman of insurer Swiss Re, for having "cut its footprint" and changing the culture of the bank and it pointed to his experience in bringing big financial institutions together. Also Read | Nashville school shooter sent a cryptic warning text to ex-classmate, it only makes sense now The hastily arranged, USD 3.25 billion deal for Credit Suisse aimed to stem the upheaval in the global financial system after the collapse of two US banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland's second-largest bank to tank and customers to pull out their money. Swiss authorities urged UBS to take over its smaller rival after the central bank's plan for Credit Suisse to borrow up to 50 billion francs (USD 54 billion) failed to reassure investors and customers. The Swiss executive branch passed emergency measures to bypass shareholder approval. Watch | Israel protests: US President Joe Biden urges Netanyahu to abandon judicial overhaul × UBS Chairman Colm Kelleher said Wednesday that he called Ermotti shortly after the emergency deal was arranged on March 19, which involved Swiss regulators, the federal government and top executives at both banks. "This is the biggest single financial transaction since 2008. That brings significant execution risk," Kelleher said on a conference call. Swiss lawmakers and academics have raised concerns that the deal could create an unwieldy Swiss banking behemoth, while UBS executives said regulatory issues loom internationally before the deal can close. Many Credit Suisse customers have expressed regret at the looming disappearance of a 167-year-old bank that has been a pillar of Switzerland's renowned banking and financial industry. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

UBS brings back Sergio Ermotti as CEO for Credit Suisse takeover after deal

After Switzerland's second-largest bank had to be saved last week by UBS, the Swiss financial regulator FINMA said it was debating whether to take disciplinary action against Credit Suisse (CSGN.S) managers (UBSG.S).

Swiss regulator: Credit Suisse could face disciplinary action

Credit Suisse is being taken over by UBS. Both are giant Swiss banks, but their investment banking arms operate all over the world. Swiss banking has the ultimate reputation for financial stability, so the slide into uncertainty for Credit Suisse, and the shotgun marriage to UBS, have left the Swiss rather dazed.

Why you should be worried if Credit Suisse collapses

U.S. stocks climbed Monday on hopes for stability in the banking sector after regulators engineered a deal for Swiss banking giant UBS to take over rival Credit Suisse.

Credit Suisse: European markets open in red, gains remain low

The shares of swiss lender Credit Suisse tumbled as much as 30% on Wednesday. The Credit Suisse turmoil resulted in torrid sessions in Europe and the united states overnight, as investors fretted about potential runs on global bank deposits. Asian markets slid Thursday, with contagion talk sweeping across trading floors, owing to fears about the swiss giant. Credit Suisse has announced it is borrowing $53.7 billion from the swiss Central Bank. Global markets have been rattled by the collapse of the silicon valley bank and signature bank, the sector's biggest failures since the 2008 financial crisis. Asian stocks followed wall street's tumble on Thursday. Investors bought gold, bonds and the dollar. while the bank's announcement helped trim some losses, trade was volatile and sentiment fragile. Credit Suisse is the first major global bank to be given a liquidity lifeline since the 2008 financial crisis.

Asian stocks tumble on Credit Suisse turmoil after torrid sessions in Europe & U.S. | Details