Thomas Jordan, president of the Swiss National Bank (SNB), speaks during the bank’s annual general meeting in Bern, Switzerland, on Friday, April 28, 2023.
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Jordan suggested that without the ELA+ loan, which was not secured in the manner typically required by the SNB, Credit Suisse risked being unable to meet its financial obligations, jeopardizing systemic stability.
Jordan’s comments echoed those of FINMA CEO Urban Angehrn, who suggested in April that allowing Credit Suisse to fall into bankruptcy would have crippled the Swiss economy and likely resulted in deposit runs on other banks.
However, Jordan noted that that there were important lessons to be learned regarding liquidity regulations and protecting against faster and larger outflows of customer deposits, according to Reuters.
The Swiss government, SNB and FINMA faced criticism and legal challenges over their handling of the forced takeover, particularly over the lack of shareholder input and the wipeout of $17 billion of Credit Suisse’s additional tier-one (AT1) bonds, which were written down to zero while common stockholders received payouts.