The Communist Party (Switzerland) learned with dismay, but not surprise, of the situation that arose with the collapse of the financial institution Credit Suisse and the subsequent takeover by UBS.
The process of capital concentration in the financial sector (albeit not exclusively) is a dynamic that is constantly evolving and is intrinsic to the economic system in which we live; a dynamic that sees the big giants progressively absorbing the others, creating increasingly monopolistic positions.
The Swiss government, as before with the 2008 bailout of UBS, has shown itself to be complicit with the greedy and incompetent managers of the financial institutions, immediately taking action to try to salvage the situation with the use of public money, without any backup plan; either financial (to be reinvested for the benefit of the community) or for employees (with worker guarantees). Thus the whole episode translates into a bargain for UBS only.
There is therefore an immediate need for clarity on the actual employment of the 9 billion francs guaranteed by the Confederation: it is scandalous that the two parties – Confederation and UBS’s management – still have different interpretations of this agreement. The Communist Party demands that the Federal Council put the interests of Swiss taxpayers and Credit Suisse’s employees first.
The new financial “monster” UBS, which has resulted from this take-over, cannot be seen as the solution to a problem, but rather as an exacerbation. Its dominant position will allow it to freely dictate access to the Swiss financial market; so much for the much-vaunted “free market competition” as the principle on which our rulers would like to base our economic order!
The Communist Party also deplores the umpteenth abuse of “urgency” to bypass the democratic consultation process of the Swiss parliament, as has already happened with the pandemic and the sanctions. The problems of Credit Suisse had been known for several months and yet Parliament was not consulted on the instruments and strategies of a possible solution to the crisis.
As a result of this situation, the Communist Party makes the following demands:
- UBS’s commitment not only of the security of jobs and an appropriate social plan, but also the repayment of public money in the coming years in the form of a dividend tax or, should UBS decide in the near future to divest what remains of Credit Suisse, in the form of a tax on the proceeds of the sale.
- A swift legal intervention against the responsible Credit Suisse managers, the retroactive collection of the bonuses paid out, and for the culprits, a ban on any further financial activities in Switzerland in the future.
- The divestment, under public control and supervision, of Credit Suisse’s healthy businesses based in Switzerland and involving assets of Swiss residents and companies, and their management and ownership transfered to Swiss cantonal banks.
- The transfer of Credit Suisse employees active in the Swiss business sector to the cantonal banks’ structures and the securing of a social plan for the redeployment of staff for the coming years.
- The strengthening of the cantonal banks to counter the new dominance of UBS in the financial market by guaranteeing them privileged conditions. The opening of special credit lines by the SNB and the granting of more favorable conditions on sight deposit accounts, to enable the cantonal banks to increase their competitiveness as a provider of credit to domestic companies and their savings management offering for citizens. Equally, there is a need for a paradigm shift in the cantonal banks themselves, establishing a national steering and coordination body and a change in policy direction away from profit maximization and toward objectives determined by the state such as economic and social responsibility and the development of the country at large.
- A more decisive intervention by the Federal Competition Commission (Comco) in connection with seismic events like the one in question. Principally with a view to preventing the creation of harmful cartels and abusive behavior by companies with a dominant position. The Comco should also be given new legislative powers so that it can play an active, meaningful role against monopolies, by defining a stronger legal basis for sanctioning company spin-offs, mergers, prohibitions or conditional authorizations where necessary.
- The possibility of division within banking of the commercial and investment activities or between domestic and foreign activities.
- The requirement of diversification of foreign activities of our financial institutions. It is not surprising that it was precisely the extreme dependence on mismanaged foreign activities, mainly in the US, which has been the precursor to several scandals, and its principal factor in the Credit Suisse crisis. Swiss financial institutions should primarily serve to finance economic activities in Switzerland and not hold systemic foreign dependencies. In this sense, it also poses questions about the increasingly US-led management of UBS. This situation lends itself into pursuing geopolitical and economic objectives that are not in keeping with Swiss national interests.
- The abolition of the “independence” status of the Swiss National Bank. Once again, it has been demonstrated how the much-vaunted “independence” of the SNB serves only to pursue anti-grass roots interests. Within a few months, the SNB has decided not to distribute a few billion francs to the Confederation and the cantons (with serious social consequences that the population will pay for!), only to be prepared to open a credit line of 50 billion francs for UBS a few weeks later!
- More regulation on the financial market, beyond the Basel III Accords. Undertaken with the awareness, that history, recent or otherwise, has shown that without addressing the root cause (leaving financial markets to play God over our lives) we will not be able to prevent new diasters of bankruptcies regardless of regulatory measures. That being said, there is a need to strengthen FINMA’s organization and supervisory prerogatives in order to intensify its scrutiny of banking institutions and to better prevent abuses in this area.
