Credit Suisse: Bank collapse damages Switzerland's repudiation for stability

So farewell to Credit Suisse. Founded successful 1856, the slope has been a pillar of the Swiss fiscal assemblage ever since. Although buffeted by the fiscal situation of 2008, Credit Suisse did negociate to upwind that tempest without a authorities bailout, dissimilar its rival-turned-rescuer UBS.

More recently, the selling look of Credit Suisse has been Switzerland's tennis deity Roger Federer. He smiles down from posters astatine Swiss airports, a awesome of strength, excellence, staying powerfulness and reliability.

But down the glossy promotion were immoderate large problems. Divisive management, costly vulnerability to collapsed concern institution Greensill Capital, a seedy money laundering case, and waning lawsuit assurance successful the past fewer months, which saw billions being withdrawn from the bank.

All it took to crook those doubts into a stampede was an seemingly disconnected the cuff remark from the Saudi National Bank, which owns astir 10% of Credit Suisse, suggesting it would not beryllium expanding its investment.

Credit Suisse's shares went into escaped fall, and adjacent a connection of assurance from the Swiss National Bank, and an connection of $50bn (£41bn) successful fiscal support, couldn't stabilise the situation.

How could this person happened?

After the fiscal situation 15 years agone Switzerland introduced strict alleged "too large to fail" laws for its biggest banks. Never again, went the thinking, should the Swiss payer person to bail retired a Swiss bank, arsenic happened with UBS.

But Credit Suisse is simply a "too large to fail" bank. In theory, it had the superior to forestall this week's catastrophe.

Also successful mentation Swiss fiscal regulators and the Swiss National Bank support an oculus connected those systemically important banks and tin intervene earlier catastrophe strikes.

It was odd, past week, to spot the remainder of the satellite reacting with existent interest arsenic Credit Suisse shares tumbled, and to hear, astatine first, thing from Switzerland.

Even the Swiss media seemed not to announcement the headlines implicit astatine the Financial Times, and seemed much funny successful the continued statement implicit however overmuch enactment neutral Switzerland should beryllium offering to Ukraine.

By the clip radical did notice, specified harm had been done that Credit Suisse was beyond saving. The autumn retired had begun to endanger not conscionable Switzerland's full fiscal sector, but Europe's.

As the authorities met successful exigency league to effort to find a solution, you could astir odor the panic successful Bern.

It's hard to debar the conclusion, immoderate Swiss are present saying, that the precise radical who should person acted to forestall Credit Suisse's meltdown were dormant astatine the wheel.

That deficiency of attraction is going to beryllium precise costly. UBS's takeover, for the paltry sum of $3 billion, too being an utter humiliation for Credit Suisse, is apt to permission its shareholders a bully spot poorer.

There volition besides beryllium occupation losses, possibly successful the thousands. There are Credit Suisse and UBS branches successful conscionable astir each Swiss town. Once the takeover is complete, determination volition beryllium small constituent successful UBS keeping them each open.

But possibly the astir costly harm of each could beryllium to Switzerland's estimation arsenic a harmless spot to invest.

Despite the scandals implicit the years related to the concealed slope accounts of dictators (including Ferdinand Marcos from the Philippines, Congolese dictator Mobutu Sese Seko and galore more), oregon the wealth laundering for cause lords and taxation evaders, Swiss banks hung connected to that estimation symbolised by Roger Federer: strong, and reliable.

But now? A strategy that allows a 167-year-old slope to spell belly up, successful the abstraction of a fewer days, astatine the outgo of galore jobs and monolithic losses successful stock value?

That could origin immense reputational damage. The Swiss banking sector, Switzerland's fiscal regulators, and its government, each accidental the takeover is the champion solution.

In the end, astatine the precise past minute, it was the lone solution. In the coming days, determination volition beryllium immoderate pugnacious questions to answer.