Good morning dear readers,
News of the giants’ takeover came late last Sunday evening. The largest bank in Switzerland, UBS, is taking over the second largest bank in Switzerland, Credit Suisse, for three billion francs. This corresponds to about the same amount in euros.
It’s a purchase that no one really wanted, but which ultimately became necessary. Because the sell-off of Credit Suisse shares in the past few days also represented a sell-off of confidence in the fortunes of the bank itself. As Swiss President Alain Berset said at a press conference:
On Friday it became apparent that the outflow of liquidity had reached such a level that it was no longer possible to restore the necessary confidence.
Most recently, Credit Suisse customers had withdrawn ten billion francs from their accounts every day. The bank was therefore on the verge of total failure, which, according to the Federal President, would have represented an “incalculable risk for Switzerland and the financial system”.
So was there no alternative to the purchase of Credit Suisse by its biggest competitor? No, analyzes financial reporter Frank Wiebe, it is even the worst of all possible solutions. Because when two major financial houses merge, one stable and one fragile, there is a very high risk that a battered monster will remain at the end. Instead, another option might have worked to prevent Credit Suisse’s total write-off: full nationalization.
To anyone who now wants to know how on earth things got this far, I recommend the reconstruction of Credit Suisse’s deep fall by Handelsblatt Schweiz correspondent Jakob Blume. The story has it all: It’s about espionage, a well-known impostor, illegal trades and the late revenge of a billionaire. The story ends yesterday – with the tragic end of an almost 170-year-old institution.
The philosopher Georg Wilhelm Friedrich Hegel was of the opinion that we only learn from history that we learn nothing at all. Anyone looking at what is happening in the banking sector right now might come to the conclusion that they were right.
After all, one of the central resolutions after the global financial crisis of 2008 was to prevent ailing banks from having to be rescued because they were “too big to fail”. Too big and systemically important to let them go bankrupt.
But the aid measures for the Silicon Valley Bank (SVB) and Credit Suisse prove that this good intention was apparently never kept. Clemens Fuest, President of the Ifo Institute for Economic Research, speaks of a “complete failure”. Read our analysis of what has and hasn’t happened in the last 15 years.
Driving packages around for money is a competitive business model. Mail order on the Internet is now declining worldwide. Nevertheless, Deutsche Post now wants to expand its parcel service DHL abroad and double sales in the next few years. Pablo Ciano, Post board member for the parcel business, announced this to the Handelsblatt. The goal is ambitious, but delivering parcels outside of Germany has paid off more and more for the company in recent years.
In 2019 it was still a loss-making business, but by 2022 the company was already making a significant profit with every package delivered abroad. Deutsche Post wants to attack, especially in the USA – on the home soil of its big competitor Amazon, of all places. The expansion plans there had failed phenomenally once before. At that time, the group pumped billions into the USA, but was fought there by all means by its competitors Fedex and UPS. In 2008, therefore, the withdrawal took place.
Obviously, a lesson was learned in Bonn: DHL is now active again in the USA, but only for cross-border imports. For the last mile to the end customer, they commission the American state-owned company US Postal Service – and that’s how it should stay.
(Photo: AP)
Today is the day of decision for French President Emmanuel Macron. Because his government will face a vote of no confidence in the French National Assembly in the afternoon. With the decision to use special powers to bypass Parliament’s vote on his controversial pension reform, Macron has put everything on one card. He linked his own political future to the future of reform.
If the right-wing forces in the National Assembly and the left-wing alliance support the motion of no confidence from the small center faction Liot, it will be up to the Republicans. The magic number is 287 – that’s how many MPs would need to vote against the government for the motion to pass. If many Republican MPs oppose their own party and join the vote of no confidence, things could quickly get very tight for Macron. Then the signs in France would be new elections.
(Photo: via REUTERS)
And then there is another meeting that many eyes should be looking at today. Russian President Vladimir Putin receives Chinese head of state and party leader Xi Jinping in Moscow. Prior to his arrival, Putin publicly flattered his guest today in a newspaper article. Russian-Chinese relations have never been as close as they are now, the Russian President writes in it.
A sentence that the Kremlin chief should use as self-insurance of his geostrategic position. But at the same time, Putin is making China’s ambitions to act as a neutral mediator in the Ukraine war untrustworthy. Xi will stay in Moscow for three days. However, he just wants to arrange a first telephone call with the Ukrainian President Volodymyr Zelenskiy. “This shows Beijing’s diplomatic imbalance,” writes Nicole Bastian, head of the Handelsblatt foreign affairs department.
I wish you a good day without imbalance.
Best regards
Her
Teresa Stiens
Editor of the Handelsblatt
