A global bank lost the time needed to repair itself
Credit Suisse lost its independence through an emergency acquisition. On March 19, 2023, Swiss authorities approved UBS’s takeover amid accelerating withdrawals. FINMA described an imminent threat despite solvency. Positive regulatory capital could not supply cash quickly enough to satisfy departing customers. [9]
The sequence was not simply a Swiss replay of a US regional-bank securities loss. It combined years of business and control failures, an unsuccessful attempt to rebuild profitability, globally mobile client money and a second wave of withdrawals after a severe late-2022 run. The analysis below separates balance-sheet stocks from client-asset flows, announced support from actual lending, and the original AT1 write-off from subsequent litigation. Historical events and later findings are dated; the legal-status check extends through October 4, 2026.
The business model and balance sheet before the final run
The Group combined wealth, Swiss banking, asset-management and investment-banking businesses. At end-2022, it reported CHF 531.358 billion in assets, CHF 264.165 billion in net loans, CHF 233.235 billion in customer deposits, CHF 157.235 billion in long-term debt and CHF 45.129 billion in shareholders’ equity. Its annual net loss was CHF 7.293 billion. [1]
Original calculations place net loans at 49.7%, customer deposits at 43.9% and long-term debt at 29.6% of total assets. These are balance-sheet proportions, not regulatory ratios. Deposits were an important funding source, but this was also a securities, derivatives and wholesale-funded institution. Assets managed for clients were a different measure: custody and investment-management relationships could generate fees without being bank-owned assets available to meet withdrawals.
At end-2022, Group was 14.1%; fourth-quarter daily-average coverage was 144%. [1] The latter compares qualifying liquid assets with modeled 30-day stressed outflows, without guaranteeing survival under every run.
Control failures weakened the franchise before March 2023
Greensill exposed weaknesses in both product oversight and relationship governance. Credit Suisse-managed supply-chain-finance funds bought securities linked to receivables selected by Greensill. FINMA found that the activity evolved to include claims on revenues that had not yet arisen, changing the funds’ risk. The bank failed adequately to identify, constrain and monitor those risks and made deficient disclosures to its supervisor. These were FINMA’s February 2023 findings about a relationship that had broken down in 2021, not a new March 2023 trading loss. [3]
Archegos revealed a different transmission channel. Through total-return swaps, the family office obtained economic exposure to shares without holding them directly. Credit Suisse was exposed when the customer could no longer meet its obligations and positions had to be unwound. FINMA’s July 2023 findings identified serious and systematic organizational failings, including inadequate risk identification, limits and monitoring. The bank’s loss exceeded USD 5 billion. A profitable customer relationship had been allowed to carry concentrated downside well beyond the revenue it generated. [4]
These episodes matter together because they undermined confidence in the institution’s capacity to control risks across businesses. The December 2024 parliamentary inquiry placed responsibility for the loss of confidence on the Board of Directors and Executive Board. It also criticized the limited effectiveness of intensive supervision, the slow development of crisis legislation and uneven information-sharing among authorities. It did not identify official misconduct as the cause of the crisis. That is a more nuanced finding than either blaming a single market rumor or treating extensive supervisory activity as proof of effective control. [5]
Two waves of withdrawals, with different measurements
FINMA’s retrospective found approximately CHF 138 billion of deposit outflows in the fourth quarter of 2022. Around CHF 92 billion left in October alone. It also reported that 51% of term deposits were withdrawn during the quarter. The denominator for that 51% is the relevant term-deposit pool, not all deposits or total assets. Wealthy clients and other large balances proved more mobile than the modeled assumptions suggested. [2]
Customer deposits fell from CHF 392.819 billion at end-2021 to CHF 233.235 billion at end-2022: an original calculation of CHF 159.584 billion, or 40.6%. [1] This full-year stock change is not FINMA’s fourth-quarter flow measure; their dates and measurement bases differ.
For first-quarter 2023, Credit Suisse reported CHF 67 billion of customer-deposit decline and CHF 61.2 billion of net asset outflows. The first equals approximately 28.7% of end-2022 deposits; the second equals approximately 4.7% of end-2022 assets under management of CHF 1,294 billion. Wealth Management alone lost CHF 47.1 billion of net client assets, about 8.7% of its opening CHF 540.5 billion. These are original calculations using the issuer’s rounded figures. [1][7]
Client-asset outflows include more than cash deposits and overlap with deposit withdrawals. Adding CHF 67 billion to CHF 61.2 billion would double-count part of the event. The issuer said withdrawals had slowed but had not reversed by April 24. [7] The merger announcement therefore did not instantly restore the lost franchise.
From restructuring to the rescue weekend
The October 2022 strategy sought to shrink and reshape investment banking while strengthening the wealth-led franchise. FINMA concluded that implementation risk and persistent weak profitability prevented the plan from restoring confidence. The bank needed time to sell businesses, reduce costs and retain customers; the continuing loss of funding made that time progressively harder to obtain. [2]
On March 15, 2023, FINMA and the SNB publicly stated that Credit Suisse met the capital and requirements for systemically important banks and that the SNB would provide liquidity if needed. This was a dated regulatory assessment, not a guarantee against further withdrawals. The statement itself illustrates the difference between satisfying measured requirements and surviving a rapidly worsening confidence shock. [8]
By March 16, Credit Suisse had announced access to up to CHF 50 billion of central-bank liquidity. On March 19, the authorities backed the UBS transaction with further emergency measures. The Federal Department of Finance describes the earlier CHF 50 billion arrangement separately from the March 19 support package. Combining every announced ceiling into a single taxpayer cost would therefore confuse instruments, dates and potential exposure. [12]
Why the published capital numbers did not settle the question
Capital absorbs losses; meets payments when they fall due. A bank can have assets exceeding liabilities on an accounting or regulatory basis yet be unable to turn those assets into transferable funds before creditors demand payment. Conversely, emergency lending can bridge a funding gap without repairing poor earnings, an unconvincing strategy or customer distrust. These were interacting problems, not competing explanations.
There was also a legal-entity complication. The parliamentary inquiry scrutinized a regulatory filter granted to Credit Suisse AG, the parent bank, in 2017. Its report said that without this filter the parent bank’s capital ratio would have fallen from 10% at end-2019 to 5% in third-quarter 2022. The inquiry regarded the filter as legally grounded but inappropriate and insufficiently reassessed. These parent-bank figures must not be substituted for the consolidated Group’s 14.1% ratio: they concern different reporting perimeters and capital treatments. [6]
The SNB’s account explains why a resolution or temporary public ownership was not the chosen weekend route. Authorities considered that resolution could destabilize already-fragile markets, while temporary state ownership presented substantial taxpayer risk. The acquisition was a crisis-management choice among imperfect alternatives. It does not demonstrate that a full cross-border resolution would necessarily have failed, because that counterfactual was never executed. [13]
The UBS transaction and the public support behind it
UBS announced an all-share exchange of one UBS share for every 22.48 Credit Suisse shares. At announcement, the consideration was approximately CHF 3 billion, or CHF 0.76 per Credit Suisse share. This was a negotiated exchange value, not a cash payment to every creditor or a valuation of all client assets. The deal did not require a shareholder vote. UBS intended to retain the complementary wealth, asset-management and Swiss banking businesses while running down much of Credit Suisse’s markets activity. [10]
The March 19 SNB release distinguished two new facilities: up to CHF 100 billion of additional assistance for UBS and Credit Suisse together, protected by preferential bankruptcy ranking, and up to CHF 100 billion for Credit Suisse backed by a federal default guarantee, the public liquidity backstop or PLB. A lending ceiling is neither the amount drawn nor an incurred fiscal loss. Preferential creditor status and a government guarantee are also different forms of protection. [11]
The separate federal loss-protection agreement covered up to CHF 9 billion of losses on specified assets after UBS absorbed the first CHF 5 billion. It was not an unlimited guarantee of the merged bank’s entire balance sheet. The government reports that the guarantee was terminated on August 11, 2023, without a payment being required. [12]
The SNB’s liquidity assistance peaked at CHF 168 billion. PLB and ELA+ assistance was fully repaid by August 2023, but that did not mean every emergency loan had disappeared: CHF 38 billion of ordinary ELA remained outstanding at year-end 2023. The SNB reports that the remaining balance was fully repaid in second-quarter 2024. The timing matters when assessing how quickly dependence on extraordinary support ended. [14][15]
Reported profit can also obscure the rescue mechanics. Credit Suisse’s CHF 12.8 billion first-quarter 2023 pre-tax income included a CHF 15 billion AT1 write-off benefit; its issuer-adjusted pre-tax result was a CHF 1.3 billion loss. [7] The accounting benefit differs from the nominal amount cited by FINMA. Derecognizing a liability is not evidence of a revived earnings franchise.
Depositors, ordinary creditors and shareholders had different outcomes
The rescue preserved operating continuity. FINMA described depositor protection and continued payment of obligations; SNB supported those aims. It was not a deposit-insurance payout. Uninsured deposits escaped the AT1 write-off, and ordinary claims continued under the operating banks. Regulatory loss-absorbing instruments had a different outcome. [9][13]
Legal completion came on June 12, 2023, when Credit Suisse Group AG merged into UBS Group AG and Credit Suisse shares ceased their independent listing. The holding-company merger initially left UBS AG and Credit Suisse AG as separate parent banks within one consolidated group, each serving clients and counterparties. Thus announcement, holding-company completion and subsequent operational integration were distinct milestones. Shareholders retained a small participation through UBS shares; they did not retain an independent Credit Suisse investment. [16]
AT1: the original write-off and the later court dispute
Additional Tier 1 instruments were designed to absorb losses under specified conditions. FINMA ordered the complete write-down of roughly CHF 16 billion of Credit Suisse AT1 principal on March 19, 2023. In its explanation four days later, FINMA argued that extraordinary state-supported triggered the contractual viability provisions and cited the emergency ordinance as an additional basis. Because equity holders received UBS shares, the different treatment of shareholders and AT1 holders became a central controversy. FINMA’s explanation is its legal position, not a final judicial determination. [9][17]
On October 1, 2025, the Federal Administrative Court issued a partial decision in case B-2334/2023, announced publicly on October 14. It revoked FINMA’s decree, finding neither the necessary contractual trigger nor sufficient statutory authority for the write-off. The court distinguished liquidity support from support directly affecting the equity base and described the affected nominal amount as approximately CHF 16.5 billion. It expressly left the requested reversal of the write-off undecided. [18]
FINMA announced an appeal on October 15; UBS also stated its intention to appeal. On October 22, the Administrative Court suspended the other pending AT1 cases until the Federal Supreme Court decided the lead case. In a January 2026 interview published by the Federal Department of Finance, the finance minister identified the Supreme Court proceeding as ongoing. The October 4, 2026 review of available primary sources did not verify a later final merits judgment or a repayment order. Accordingly, this case study does not treat the 2025 ruling as final, assume that the instruments have been restored, or assign a recovery amount. [19][20][21][22]
Three propositions can therefore coexist: the instruments were written down in 2023; a lower court later rejected the basis of the decree; and final remedies were not established in the verified record. The eventual allocation of liability, any reinstatement or compensation, and the timing of recovery remain distinct questions. The litigation does not retrospectively convert the rescue into a conventional bankruptcy distribution.
What the case establishes
Credit Suisse demonstrates how a large financial institution can exhaust its customers’ willingness to fund a turnaround before an accounting balance sheet is exhausted. The withdrawal of deposits reduced immediately available financing, while the departure of managed assets damaged future fee income. Emergency addressed the first pressure; a change of ownership sought to arrest both. That distinction explains why massive central-bank support and the loss of the bank’s independence occurred together.
The public support was substantial but must be measured as actual lending, contingent guarantees and eventual repayments rather than one undifferentiated bailout number. The distributional outcome was also uneven: operating continuity for customers and ordinary creditors, deeply impaired shareholder value, and a complete AT1 write-off whose legal basis and consequences became contested. A successful stabilization of banking services is therefore a different conclusion from a final settlement of every investor’s legal claim.
Sources
- Credit Suisse: Annual Report 2022, consolidated Group balance sheet, capital and liquidity disclosuresFiling / report · PDFBack to text: ↑1↑2↑3↑4
- FINMA: Lessons Learned from the Credit Suisse Crisis, December 19, 2023Source · PDFBack to text: ↑1↑2
- FINMA: Greensill enforcement findings, February 28, 2023SourceBack to text: ↑
- FINMA: Archegos enforcement findings, July 24, 2023SourceBack to text: ↑
- Swiss Parliament: Parliamentary Investigation Committee findings, December 20, 2024SourceBack to text: ↑
- Swiss Parliament: English summary of the investigation report, December 2024, especially pp. 6–8Source · PDFBack to text: ↑
- Credit Suisse: First-quarter 2023 results, April 24, 2023, SEC-filed issuer releaseFiling / reportBack to text: ↑1↑2↑3
- FINMA and SNB: Joint statement on market uncertainty, March 15, 2023SourceBack to text: ↑
- FINMA: Approval of UBS–Credit Suisse merger, March 19, 2023SourceBack to text: ↑1↑2↑3
- UBS: Acquisition announcement, March 19, 2023SourceBack to text: ↑
- SNB: Liquidity assistance announcement, March 19, 2023Source · PDFBack to text: ↑
- Federal Department of Finance: UBS takeover and support-package FAQSourceBack to text: ↑1↑2
- SNB: Thomas Jordan on the lender-of-last-resort response, November 1, 2023, published by BISSourceBack to text: ↑1↑2
- SNB: Termination of PLB facility and ELA+ repayment, August 11, 2023Source · PDFBack to text: ↑
- SNB: Annual Report 2024, Accountability Report, p. 64, remaining ELA repaymentFiling / report · PDFBack to text: ↑
- UBS: Acquisition completed, June 12, 2023SourceBack to text: ↑
- FINMA: Stated basis for AT1 write-down, March 23, 2023SourceBack to text: ↑
- Federal Administrative Court: Partial decision B-2334/2023 of October 1, 2025; release October 14, 2025Source · PDFBack to text: ↑
- FINMA: Announcement of appeal, October 15, 2025SourceBack to text: ↑
- Federal Administrative Court: Suspension of other AT1 cases, October 22, 2025SourceBack to text: ↑
- Federal Department of Finance: January 24, 2026 interview identifying the AT1 proceeding as ongoingSourceBack to text: ↑
- UBS: Third-quarter 2025 report, AT1 decision and intended appeal, p. 6Source · PDFBack to text: ↑