GENEVA (AP) — The Swiss government said on Tuesday it is ordering Credit Suisse to temporarily suspend employee bonuses following a plan to take over Swiss Bank No. 2 by rival UBS.
Switzerland’s finance ministry says federal law allows the government to impose “reward-related measures” in cases involving Switzerland’s largest banks.
At the end of last week and over the weekend, the Swiss authorities, with the support of the central bank and financial regulators, tried to arrange the sale of Credit Suisse to UBS for $3.25 billion.
The outflow of deposits and years of problems raised fears that it could fail and provoke an international financial crisis after the collapse of two US banks.
The Swiss government says it has no plans to block last year’s bonus payments, which were granted but should be paid immediately because it does not want to punish Credit Suisse employees “who did not cause the crisis.”
But authorities in the capital Bern have said they will ban payments of “deferred” bonuses – even if they have already been granted – with the exception of bonuses that are “already in the process of being paid.”