In an extremely rare move, Switzerland's parliament will probe the government-orchestrated takeover of the stricken Credit Suisse bank by larger rival UBS, in an extremely rare move, following a vote on Thursday.
After the lower house of parliament voted unanimously Wednesday for the creation of the rare commission of inquiry, the Council of States voted 37 - 5 for it on Thursday.
The commission will examine the legality, opportunity, and effectiveness of the Swiss authorities' activities in the takeover. It will report on gaps seen at the institutional level like UBS, Credit Suisse among 30 international banks deemed too big to fail due to their importance in the global banking architecture.
But the collapse of three US regional lenders left Credit Suisse looking like the weakest link in the chain and its share price plummeted more than 30 percent on Mar 15, a result of the collapse of three U.S. regional lenders.
The Swiss government, the central bank and the financial regulators then stepped in and forceful UBS into a $3.25 billion takeover of the company on Mar 19 before the markets reopened the following day.
The government feared that Credit Suisse would have quickly defaulted and triggered a worldwide banking crisis that would also have destroyed Switzerland's valuable reputation for sound banking.
The commission will be made up of 14 lawmakers - seven of each parliament - with all the major parties represented. He will be nominated next week, according to sources who spoke on condition of anonymity. It will have a budget of five million Swiss Francs US $5.5 million, a large remit that will be able to decide the extent of its investigations and could trawl back over several years. There is no time limit, but the commission is expected to last for more than a year.
The government said Friday it would give its full support to the commission, deeming it useful and necessary to examine in detail the events behind the emergency rescue.
It is the fifth parliamentary committee inquiry to take place in Switzerland.
The last time was in 1995, and it was investigated by the U.S. Federal Pension Fund.
It is the most powerful tool at parliament's disposal, Le Temps newspaper said, with the authority to consulter the government's confidential minutes and question senior officials.
The combination of Credit Suisse and UBS, which should be completed on May 12th, raises serious concerns in Switzerland regarding job opportunities, competition, and the size of the resulting bank relative to the Swiss economy.