In the event of the nationalization of Credit Suisse, the Swiss government wanted to put Sergio Ermotti at the head of the board of directors.
Had the Swiss government been forced to nationalize the reeling Credit Suisse, Sergio Ermotti was its choice to become chairman of the board, according to a «Financial Times» (behind paywall) report over the weekend citing sources.
Instead, Ermotti was tapped as CEO of UBS shortly after it was decided on March 19 that Credit Suisse would be integrated into UBS in a deal brokered by the federal government, Swiss National Bank, and Finma.
Top of the List
Swiss authorities were already preparing contingency plans in October as Credit Suisse was undergoing a bank run. The plans are said to have also led to the drawing up of a list of executives who could be slotted into the chairmanship and be allowed to bring their team. Ermotti reportedly topped the list.
Should a takeover fail, the alternative plan for dealing with Credit Suisse was a resolution, an insolvency that had not been tested on a major global bank since the financial crisis.
Slower Transformation
Under such a plan, Finma would have assumed control of Credit Suisse, and its Tier 1 bonds written off and bail-in bonds converted into equity.
Changes would have been made by Finma Credit Suisse's board and management team, to speed up the resolution of the investment bank, albeit at a slower pace than the plan currently being implemented by UBS.
Successor's Successor
Ermotti served as UBS group chief executive for nine years until 2020 and was brought back just days after the takeover to replace Ralph Hamers and implement the integration. Plans for the combined business of the two major Swiss banks will be announced when half-year results are reported on August 31.
UBS as well as Credit Suisse and federal authorities declined to comment to the FT.
