WORLD WORLDWIDE ITALY News Journal Update - (en) Italy, Galatea: The bankruptcy of Credit Suisse as yet another demonstration of capitalist bankruptcy (ca, de, it, pt, tr)[machine translation]

 Last week, the Saudi National Bank announced it could not provide financial

assistance to Credit Suisse - in which they hold 10% shares. This situation has
triggered fear among various customers, especially after the events in the United
States with the Silicon Valley Bank; in a few days the Swiss bank had losses of
10 billion francs a day. The Swiss National Bank, to plug these losses, initially
provided 54 billion francs, and then increased to about 100 billion francs. ----
Over the weekend, precisely on March 19, a press release from the Swiss National
Bank is published:
"UBS today announced the acquisition of Credit Suisse. The acquisition was made
possible with support from the Swiss federal government, the Swiss Financial
Market Supervisory Authority FINMA and the Swiss National Bank (SNB). With the
acquisition of Credit Suisse by UBS, a solution has been found to ensure
financial stability and protect the Swiss economy in this exceptional situation.
Both banks have unrestricted access to the SNB's existing facilities, through
which they can obtain liquidity from the SNB in accordance with the "Guidelines
on Monetary Policy Instruments". Furthermore, on the basis of the Federal
Council's emergency ordinance, Credit Suisse and UBS can obtain a liquidity loan
with preferred creditor status in the event of bankruptcy for a total amount of
CHF 100 billion. Furthermore, on the basis of the Federal Council's emergency
ordinance, the SNB can grant Credit Suisse a liquidity loan of up to 100 billion
francs, covered by a federal insolvency guarantee.[...]By providing substantial
liquidity assistance, the SNB is fulfilling its mandate to contribute to the
stability of the financial system and is continuing to cooperate closely with the
Confederation and FINMA to this end.[...]"1

The decision taken, especially before the opening of the Asian markets with
possible even more disastrous consequences for the Swiss bank, was explained thus
by the president of the Swiss confederation Alain Berset: "On Friday (March 17,
ndt), the liquidity outflows and the market volatility demonstrated that it was
no longer possible to restore the necessary confidence and that a quick and
stabilizing solution was badly needed. This solution was the acquisition of
Credit Suisse by UBS. The Federal Council supported it after several meetings
with the Swiss National Bank, our regulator FINMA, Credit Suisse and UBS. The
Federal Council is therefore confident that, in this difficult situation, the
acquisition of Credit Suisse by UBS is the best solution to restore the
confidence that has recently been weakening on the financial markets and to
better manage the risks for our country and its citizens." 2

UBS's acquisition of Credit Suisse was worth CHF 3.25 billion. The "trade
solution," according to Karin Keller-Sutter, Swiss finance minister, avoided a
bailout that could harm Swiss taxpayers, they say: "We really wanted to avoid a
bailout for several reasons. But maybe I'm back to the question of the context of
"too big to fail." I mean, the "too big to fail" context couldn't have applied
here. Really, because it usually applies to a bank that is no longer able to meet
its liabilities. And here we have a liquidity problem. So that's not typical at
all. As I said in my introduction, the failure of Credit Suisse would also have
had collateral damage, massive collateral damage on the Swiss financial market as
well as a contagion risk to UBS and other banks and also internationally. I then
got in touch with my colleagues in the UK and the US. They were very, very
thankful for this solution because they really feared that Credit Suisse might go
bust with all the losses. And, you know, in this scenario the taxpayer has less
risk. I mean, bankruptcy would have been the highest risk because the cost to the
economy would have been huge.[...]"3

The FINMA was of the same opinion which, in a press release, fears a crisis of
confidence in Credit Suisse "which has manifested itself in significant outflows
of client funds. This situation was intensified by the US banking market turmoil
in March 2023. The risk is that the bank will become illiquid, even if it remains
solvent, and the authorities need to intervene to avoid serious damage to the
Swiss and international financial markets."4

The purchase of Credit Suisse by UBS was one of the most significant in the
banking system since the 2008 crisis. But this does not change the fact that the
acquisition has shadows that, sooner or later, will affect the Swiss economy and,
more generally, worldwide. As demonstrated once again, banks privatize gains and
socialize losses; the institutions (in this case Swiss) got this purchase
accepted not only by the shareholders (especially small ones) but also by the
more than 50,000 employees of Credit Suisse - who, in a logic of cost containment
on the part of UBS, a large part of them they will be fired.

In a March 19 Financial Times commentary on Credit Suisse, the transition that
took place was "a messy and unsightly one that no one really wants. It also seems
necessary. But it is not known whether this operation could stop the runs of
European banks. Reassurance is a dangerous game in a financial panic situation.
It can confirm investors' fears as easily as they are allayed. Broader action by
central banks may be needed."

To avert further "fears" stemming from the Credit Suisse issue, the Fed, the Bank
of Canada, the Bank of England, the Bank of Japan and the European Central Bank
have announced measures to increase the flow of money into the global financial
system - guaranteeing, in theory, adequate liquidity and "easing tensions on
global markets".

The collapse of Credit Suisse is, therefore, an expression of the vast change in
the financial landscape over the past year, as central banks, led by the US Fed,
rapidly raised interest rates after providing essentially free money for 15 years
with various forms of "quantitative easing".

In doing so, states rushed to mobilize money and provide credit in the trillions
to save the financial system - and thus the entire economy from collapse. Without
the circulation of money and credit - where the banks manage as long as they make
a profit - there is nothing else to do in the capitalist system. For this reason,
governments do everything possible to support the banks through the purchase of
their toxic loans, give capital injections or grant a credit rating guaranteed by
the state. The point of all this assistance is for a reset of the crisis to
happen and start over.

Those who will mainly pay for these bailouts or "commercial solutions" (to quote
Keller-Sutter) will be the working, unemployed and retired people with physical
and mental fatigue, low wages, perpetually insecure existence and declining pensions.

The political class and the bourgeoisie, on the other hand, will not only pay
nothing (since they will recycle themselves in a thousand ways like new
chameleons of Depretes' memory), but they will make the mass accept this state of
affairs through the means of communication (traditional and new). .

In this way, the alleged "errors" committed by some single company, especially in
the financial sector, will be presented as rare events that happen suddenly and,
often, due to those who act in an unethical or "humane" way.

Note

1"Swiss National Bank provides substantial liquidity assistance to support UBS
takeover of Credit Suisse". Link:
https://www.snb.ch/en/mmr/reference/pre_20230319/source/pre_20230319.en.pdf

2 "Berset: UBS Buying Credit Suisse Was 'Best Solution". Link:
https://www.youtube.com/watch?v=zIQReTJpArI

3"Swiss Finance Minister: UBS Buying Credit Suisse Is Not a Bailout". Link:
https://www.youtube.com/watch?v=r1VZ5oPmPd8

4"FINMA approves merger of UBS and Credit Suisse". Link:
https://www.finma.ch/en/news/2023/03/20230319-mm-cs-ubs/

https://gruppoanarchicogalatea.noblogs.org/post/2023/03/20/il-fallimento-della-credit-suisse-come-ennesima-dimostrazione-del-fallimento-capitalista/
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