updatedMarch 18, 2023 at 6:01 p.m
CS CrisisIf the state saves CS, ex-bosses should pay
In the event of a rescue operation, the ex-presidents of Credit Suisse would have to pay back bonuses, politicians from left and right are demanding. The question has not been legally clarified.
That’s what it’s about
The National Bank guaranteed CS a loan of CHF 50 billion. This is secured by bank assets, say industry insiders.
But if the Confederation has to inject national wealth in order to save CS, then it will have to take recourse against the former presidents of the board of directors, says SVP parliamentary group leader Thomas Aeschi.
SP co-president Cédric Wermuth agrees. However, the SVP has always prevented regulatory measures for the banks, so there is no remedy.
The SP is for a bonus ban.
Last week, the Swiss National Bank promised Credit Suisse a loan of 50 billion. According to industry experts, this is covered by the bank’s assets. But it could get worse – 14 years ago, the federal government had to inject 60 billion francs to save UBS. Politicians from left to right are demanding that if the Swiss Confederation steps in again, the ex-managers of the bank would have to pay up.
SVP parliamentary group leader Thomas Aeschi writes on Twitter that the former presidents of the board of directors, Walter Kielholz and Urs Rohner, would have to be held financially accountable in this case.
“If the Confederation saves another big bank, it will have to take recourse against those responsible for the last few years. Because it’s taxpayer’s money,” he explained to 20 minutes. All the more so as those responsible for CS have earned very well in recent years. “For example Urs Rohner, who pays taxes in the canton of Schwyz, but has his villa on the Gold Coast.”
SP co-president Cédric Wermuth is also in favor of ex-bosses being held accountable in the event of a bank bailout. “Aeschi is certainly right,” says Wermuth. “However, the SVP has so far rejected stricter rules for banks and managers. That’s why we don’t have the tools today to fight such excessive remuneration.”
Ban bonuses altogether?
The SP has been calling for a general ban on bonuses for some time, says the National Council. The most recent advance dates from 2021 and was made with a view to “billions in losses at Credit Suisse”. Bonus payments should therefore be prohibited at systemically important banks.
Wermuth refers to the Aargauer Kantonalbank, which has a wage cap of CHF 600,000. “The bank is super successful,” he says. In the past, however, there has also been criticism: AKB was unable to find a boss because of the wage cap, it was said around 2015. 600,000 were apparently not enough.
Thomas Aeschi rejects a bonus ban. “I would not go so far.” With a ban, the Swiss banks would be sidelined internationally, he says.
The question of repayment has not been legally clarified
Would it even be legally possible to prosecute the former Chairman of the Board of Directors of Credit Suisse if the state had to step in? Lawyer Nicolas Facincani, who specializes in remuneration and bonuses, among other things, says: “The question has not yet been answered by the Federal Supreme Court, so there is no established case law.” As a rule, a repayment obligation is possible if this has been agreed and if the contract is terminated within three years of receiving the bonus.
You should definitely try, says finance professor Marc Chesney from the University of Zurich. “Where there’s a political will, there’s a way.” Not only Rohner and Kielholz would have to be held accountable, but also those responsible for operations for the last 15 years, Brady Dougan and Tidjane Thiam. The auditors and the financial market supervisory authority would also have to explain themselves, says Chesney.
«For years we have been hearing from the so-called financial experts and bank managers that the high bonuses are there to get the best people. Were these people the best?” Chesney calculates that Dougan and Thiam were paid tens of millions while the share price fell massively during their time. “As the bosses of a systemically important bank, they played poker with taxpayers’ money.”
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