Following the completion of its legal takeover of Credit Suisse in the coming weeks, UBS will quickly examine its options and find a solution for Credit Suisse in Switzerland by late summer, UBS Vice Chairman Lukas Gaehwiler said in Lugano on Thursday.
«There are moments in life when you have an exact picture in your mind of what you just did then, like on September 11, 2001, when the World Trade Center in New York was attacked, when the lockdown was imposed on March 16, 2020. And on March 15, 2023, at 2 pm...,» Lukas Gaehwiler said at the Lugano Banking Day in Ticino yesterday.
Although the UBS Board of Directors was preparing very carefully for this in the months leading up to the event, there was always the hope the call from Bern would never come, the vice chairman of the board of Switzerland's largest bank explained.
Dramatic Days
«We even thought about whether or not to pick up the phone. But when we saw the number, it was clear to us that there was no way around it,» Gaehwiler recalled of the now historic call from Swiss authorities that heralded the government-ordered rescue of crisis-ridden Credit Suisse.
The period leading up to the announcement of the Credit Suisse takeover on the evening of March 19 was intense, he said. «It's an experience that, in retrospect, you wouldn't want to miss, but still wouldn't wish on anyone, and certainly not on the next generations,» emphasized Gaehwiler, who, according to his estimates, worked around 100 hours during those dramatic days.
Credit Suisse Training
Asked about the future of Credit Suisse, Gaehwiler stressed the bank doesn't yet belong to UBS. «But in a few weeks, I'll be able to say that I've been working at the same bank for 34 years,» Gaehwiler said grinning, noting he initially worked at Credit Suisse for 20 years before moving to UBS in 2009.
«I did all my training at Credit Suisse. It made it possible for me to do the job I have today,» emphasized Gaehwiler, who believes the cultural differences between the two institutions, namely in Switzerland, are much smaller than in the US or Asia, for example.
Various Options for Credit Suisse
He said he became aware of this when UBS examined Credit Suisse's credit and risk positions during the 48-hour due diligence process. «We came across Korean financial products with maturities into 2072,» he recalled. «That's something different than what we do here in Switzerland.»
With that in mind, Gaehwiler looks forward to the merger of the two banks here in Switzerland with some confidence. However, it is not yet possible to say what will happen with Credit Suisse, he remarked to finews.com on the sidelines of the Lugano Banking Day.
First, the legal takeover must be completed, which happens at the end of May or the beginning of June. «In Switzerland, we will look at all options for Credit Suisse. Do we keep it, should it become independent, or is there something in between? After the summer vacations, we should have a solution,» Gaehwiler said.
Evaluate the Black Box
«It's certainly the case that we (as UBS) want to continue with our strategy,» he continued, comparing the Credit Suisse debacle to a plane crash. «Credit Suisse didn't have an engine failure, it had a tragic crash. That's why we now have to evaluate, figuratively speaking, the black box, determine if there was a design flaw in the aircraft, or if the pilot didn't steer properly.»
There are the Swiss Financial Market Supervisory Authority (Finma) and the Swiss National Bank (SNB) that act as air traffic controllers. «We still have to understand a lot of things better. We would do well to analyze the matter self-critically and beware of rash decisions,» warned Gaehwiler given ever louder calls from politicians for tighter banking regulation.
Ticino at the Center of World Finance
Gaehwiler described the appointment of Ticino native Sergio Ermotti as CEO of the new UBS as a stroke of luck. «The board of directors agreed that if the call came from Bern, there could be only one pilot, Sergio Ermotti,» he said. Ermotti, who previously led UBS from 2011 to 2020, is the only one who has proven how to downsize an investment bank while understanding wealth management, as well as our country and our political system, he added.
«And we are happy that he is catapulting Ticino back into the center of world finance,» Gaehwiler told the audience of around 200 in Lugano.