Employees ‘shocked’ after historic bank deal in Switzerland

An association of bank employees said it was deeply shocked by the possible consequences of the deal between UBS and Credit Suisse.

Switzerland woke up to a new era on Monday after UBS snapped up Credit Suisse in a government-brokered bailout that dented the country’s pride in its banking expertise.

An association of bank employees said it was deeply shocked by the possible consequences of the deal to save 167-year-old Credit Suisse after customer and market confidence in the lender evaporated.

In a package orchestrated by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.24 billion) for Credit Suisse and take up to $5.4 billion in losses.

With their headquarters just a few minutes’ walk away, not far from Lake Zurich in the city center with snow-capped mountains on the horizon, the two lenders have been mainstays of global finance for decades.

The banks, two of the most systemically relevant in global finance, hold combined assets of up to 140 percent of Swiss gross domestic product (GDP), according to the central bank, in a country that relies heavily on of finances for your economy.

The Association of Swiss Bank Employees, in a statement to the Reuters news agency, demanded that UBS keep job cuts to an “absolute minimum.”

“The jobs of many employees are at stake,” he said, adding that he was in contact with management.

The statement underscores the sense of unease in Switzerland, with its reputation as a global financial center at stake.

The Swiss media were also shocked by the events.

“A zombie has gone but a monster has been born,” read the headline of a comment in the Neue Zuercher Zeitung, often seen as the voice of the establishment.

“A few months ago, no one would have thought that Credit Suisse would fail. However, it is not an accident,” the newspaper wrote in the article accusing the bank of arrogance and pride.

“The Swiss bank had a stock market value of CHF 100 billion in 2007, of which CHF 7 billion was left last Friday,” he said.

“Therefore, there has been massive destruction of value, at the hands of managers who have carelessly underestimated the risks and helpless board members who have too often been unable to control things.”

The Tages-Anzeiger newspaper described the affair as a “historic scandal”.

Still, UBS Chief Executive Ralph Hamers, who will lead the new combined entity as chief executive, was confident his bank was up to the challenge of making the acquisition a success.

“The acquisition means we are bringing stability and security back to CS customers,” Hamers said. “But also that we are defending the reputation of the Swiss financial center.”