Switzerland defends shotgun merger with Credit Suisse

The use of emergency law was necessary to stabilise the situation, according to the finance minister of Switzerland, ZURICH Reuters -- Switzerland defended the shotgun merger between the country's two largest banks in an interview with Swiss newspaper Neue Zuercher Zeitung on Saturday.

Credit Suisse would not have survived Monday, according to Karin Keller-Sutter, who said that it needed to find a quick solution for Credit Suisse's woes.

Without a solution, payment transactions with CS in Switzerland would have been disrupted, possibly collapsed, and wages and bills could no longer be paid, she said.

It was announced last Sunday that UBS agreed to buy its rival Credit Suisse for 3 billion Swiss francs $3.23 billion in stock and assume up to 5 billion francs $5.4 billion in losses in a merger designed by Swiss authorities to prevent market turmoil in global banking.

Emergency law was used to allow banks to reach a speedy agreement. Some of the shareholders, for example, have been largely bypassed, which has angered some of them.

Keller-Sutter said that the Swiss government's executive Federal Council went as far as necessary to achieve the goal of stabilisation. If we did nothing, CS shares would have been worthless on Monday and shareholders would have gone home empty-handed, she said.