The Swiss Competition Commission was left on the sidelines during UBS's government-prompted rescue of Credit Suisse. Although its position on the matter is still under wraps, the regulator is not out of the game yet, finews.com research shows.
Although nobody pays much attention to the fact anymore, UBS's takeover of Credit Suisse in March last year seems to have been a done deal stitched up well ahead of time – even from the point of view of cartel law.
Debtors Come First
The Swiss banking regulator, Finma, pushed the rescue through claiming it had the competencies necessary to do so, taking the wand right out of the Competition Commission's hands. The regulator weighed the interests of Credit Suisse debtors as being more important than domestic market considerations.
The commission, however, did submit its position to the Finma in autumn, something that the regulator has been reviewing since then. The release of that statement has been delayed several times, according to the Swiss weekend newspaper «Sonntags-Zeitung» (paywall, German only). The reason: UBS wants certain business secrets redacted from any disclosures.
Adding Insult to Injury
According to information revealed to finews.com, Finma could approve a release of the statement imminently, although the analysis will no longer be able to change matters. When it comes to the rescue, Finma is now responsible for making sure that cartel laws are kept.
A Finma spokesperson maintained that it was still possible that the effects of the megamerger on competition in the domestic market would be looked at subsequently. However, it is unlikely that the regulator would deem competitive aspects so highly that it would overturn key aspects of the Credit Suisse integration process. Doing that would also be a significant infraction of the agreement made with UBS.
Future Supervision
That does not mean that the competition commission can't intervene when it comes to UBS even if Finma continues to allow it to hold dominant market positions. «Cartel law allows for dominant market positions by companies except when competition is impacted by oligopolistic situations», indicated Frank Stuessi, the competition commission's deputy director, when asked.
«The competition commission can start a case on any suspicion that a company is abusing its position,» he said. That is true for UBS's future business in Switzerland, he maintained.
Where to Look
In other words, if the commission sees it as being necessary to keep close tabs on UBS bankers, it will do so. It will also intervene when it sees violations of cartel law. At that point, given that debtor considerations will not weigh a large role in the market matters, the Finma will have to sit back and watch from the sidelines instead.
The competition commission also probably knows exactly where it needs to look. According to sources, the commission's position minutely detailed UBS's different business areas and its relative market power over more than 100 pages. And nobody does that kind of work so that it can end up hidden away in an archive.
Normal Redactions
The supposed redactions that UBS requested will not affect the significance of the analysis. The deputy director maintained that they were nothing unusual.
In that case, they are also nothing that would stop the commission from doing its work.
Evaluation Still Underway
The Finma spokesperson did not say anything related to any future interventions by the competition commission. When it comes to the commission's statement, which is still with Finma, he maintained. «The evaluation of the merger is still underway. We will also not say anything when Finma has made any decisions.»
