Switzerland’s upper house of parliament voted on Tuesday after a heated debate to approve retrospectively the 109 billion Swiss francs ($120.5 billion) in financial guarantees used to rescue Credit Suisse last month.
Lawmakers were recalled for a rare extraordinary session to discuss the rapid rescue of Credit Suisse and the Swiss government’s open chequebook response to a collapse which many in the country have blamed on top management.
A shotgun marriage which saw Credit Suisse taken over by Zurich-based rival UBS for 3 billion Swiss francs and propped up with more than 250 billion Swiss francs in guarantees and support has been the subject of widespread criticism.
But 29 of Switzerland’s 46-member Council of States upper house approved the measure. The Swiss parliament’s lower house is scheduled to vote on the matter later on Tuesday in a session likely to go until midnight local time (2200 GMT).
The votes are, however, largely symbolic as the state has committed the funds and lawmakers cannot overturn that decision.
In the lead-up to the merger last month, Swiss emergency law was used so that a sub-group of six members of parliament approved the financial commitment on behalf of the legislative body, to the ire of the almost 250 lawmakers left without a say.
“The use of emergency law has reached a level in the last three years that is beginning to annoy me,” Hansjoerg Knecht, a member of Parliament’s upper house, said.
Calling the situation where the legislative body can only approve the already committed credits “unsatisfactory”, Knecht said if Credit Suisse were to require more cash, there should be no use of emergency law to bypass parliament.
Switzerland’s finance minister had addressed the Council of States before the vote and acknowledged the ire being voiced.
“I heard anger, I heard frustration, sometimes I also heard a bit of helplessness,” Karin Keller-Sutter said, adding that the merger between historic cross-town rivals Credit Suisse and UBS was not a forced marriage, but one of convenience.
She also there needs to be a discussion around what kind of financial centre Switzerland wants to be and if it wants to continue playing in the top-league.
“What kind of consequences does this have for the financial regulator? For politics? These discussions need to be had. What do we really want and if we want that, we won’t get there without carrying certain risk in future as well,” she said.
A poll of Swiss economists found that nearly half think the takeover of Credit Suisse by UBS was not the best solution, warning the saga has dented Switzerland’s reputation.
Meanwhile, Celine Widmer, a Swiss National Council member for the left-leaning Social Democrats told Reuters ahead of the vote that “lots of questions” needed to be answered.
Politicians also questioned why the Swiss financial regulator was unable to prevent Credit Suisse’s failure.
“Does FINMA need stronger instruments or have they done a bad job?” Eva Herzog asked during a speech to the upper house.
Herzog is one of the six members of parliament who approved the rescue deal on behalf of the legislative body.
As part of the unusual event, the third such session in more than twenty years, the Swiss parliament has a chance to challenge the rushed rescue package and discuss whether conditions can be imposed on Credit Suisse.
Last week, Switzerland announced it was cutting bonus payments for Credit Suisse’s top management.
Credit Suisse’s rescue angered not only politicians but many in Switzerland. A survey by political research firm gfs.bern found a majority of Swiss did not support the deal.
There are also growing worries about jobs and in an open letter to parliament, the Swiss Bank Employees’ Association said that Credit Suisse and UBS must freeze any cuts.