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 A stack of gold bars branded by Credit Suisse bank.
Photo by regularguy.eth on Unsplash

On 20 March 2023, the President of Switzerland announced that the country’s second-largest bank, Credit Suisse, would be bought by its competitor UBS. The deal was made in negotiations between the banks, the Swiss government, and representatives from foreign governments – with pressure having been built up from US, European, and British sides.[1] Promoters of the deal talk about it as an emergency rescue that prevented global financial market turmoil.[2] Apparently, three options were prepared by the Swiss banking regulator FINMA: bankruptcy, nationalization, and the takeover by UBS. The latter option was in the end the one that the Swiss Federal Council pushed through using emergency powers.[3] Credit Suisse, founded in 1856, was considered too big to fail. UBS agreed to the deal at a price of CHF 3 billion (3.2 billion USD), which was a stark fall of Credit Suisse’s share price from CHF 1.86 on the previous Friday to just CHF 0.76.[4]

Allegedly other banks and firms were looking into potentially buying Credit Suisse, among them asset manager Blackrock.[5] The use of emergency powers means that shareholders were not consulted on the deal.[6] Switzerland’s federal prosecutor has in early April started an investigation into potential breaches of criminal law by government officials, regulators, and bank executives involved in the deal.[7]

How did the second most powerful bank in one of the world’s most important financial centers end up in this situation? A wide range of reasons have been put forward for the collapse of the bank. Some say that Credit Suisse engaged too much in risky business, US-style investment banking, and shareholders blamed ‘foreign’ values at the bank for its troubles.[8] Part of this so-called Anglo-Saxon business model was represented by very high bonuses and salaries as well as a riskier approach to banking.[9] In an article by The Guardian, Credit Suisse’s business approach was compared to UBS’ preceding the 2008 financial crisis in which UBS got bailed out by the Swiss government – leading to a more careful approach in the years following, while Credit Suisse continued with high-risk business.[10]

But Credit Suisse has been plagued by scandal for much longer than since the 2008 financial crisis. In 1977 it was revealed that the bank had taken and hidden undeclared money from wealthy Italians – which led to the so-called ‘Chiasso scandal’.[11] This was followed by revelations about the bank having stored parts of the fortunes stolen by Philippine dictator Marcos and his wife (1980s), accepting corrupt funds of a value of 214 million USD from Nigeria’s military dictator Sani Abacha (1990s), circumventing US sanctions against Iran and other countries (1995-2007), aiding tax evasion by US and German clients, breaching money laundering rules in transactions linked to 1MDB, the corruption scandal-ridden Malaysian investment fund (2017), laundering money for a Bulgarian drug ring,[12] or mis-investing in hedge fund Archegos and lender Greensill Capital which both collapsed in 2021. In 2022, the leak Suisse Secrets topped off this long list, revealing that the bank worked for clients involved in drug trafficking, money laundering, torture, and other crimes.[13] Many of these scandals led to hefty fines imposed on Credit Suisse by a variety of government regulators, from the US to Switzerland, Japan, and Singapore among others. They also further tarnished the bank’s reputation, harming investor and client trust. Shortly before the bank’s imminent collapse, its main investor – Saudi National Bank – announced it would stop giving money to Credit Suisse, leading to people withdrawing hundreds of millions.[14] This was in a context where markets were already unstable due to the recent collapse of two US banks.[15]

After the takeover, the new owner UBS has a balance sheet exceeding that of the Swiss National Bank.[16] The bank will be double the size of the Swiss economy.[17] UBS estimates that it will move from fourth to second largest wealth manager globally and from sixth to third asset manager in Europe.[18] Indeed the size poses financial risks. Groups representing UBS shareholders warned that risk is now hugely concentrated and that the bank needs to reduce risky investment banking operations.[19] A question that has been raised by experts such as Professor Marc Chesney from the University of Zurich is what happens when UBS runs into trouble, and who will save them then? Some think Credit Suisse should have instead been broken up into smaller parts and sold to various financial companies.[20]

But apart from the financial risks, there are also potential political implications stemming from the creation of such a large financial institution. Cédric Wermuth, the co-president of the Social Democratic party, said «the risk that this monster bank can use its monopoly standing to blackmail the government and dictate its own regulation is enormous.»[21] This fear links to two important concepts: monopolization and structural power.

There is growing concern about monopolization in the global economy – the concentration of economic power among a few actors. Its consequences can include “high consumer prices, low wages for workers, less business dynamism and startup rates, less innovation, lower growth, rising inequality, fragile supply chains, environmental harm, political capture, national security risks, and the subversion of the democratic process,” according to a report by the Balanced Economy Project.[22] UBS’ new staggering size and the absence of an equal competitor in the Swiss market will lead to customers – for example pension funds – being less able to leverage competition to obtain good conditions and prices.[23] It could increase the costs of banking services more generally.[24] This monopoly position also has impacts on the political power of UBS. The financial strength deriving from monopoly power can for example translate into political power – through political financing or lobbying – which can in turn reinforce the firm’s monopoly position.[25] More important than that is the political power stemming from the key position the firm occupies in the economy, which links to the concept of structural power.

Structural power is the political power that businesses have due to their perceived importance to the economy. Governments in this case protect the interests of businesses to attract investment or to prevent companies from relocating. The protection of business interests here is said to be automatic and to happen without any active lobbying on behalf of the companies.[26] In the case of UBS, the structural power is not only about a perceived relocation risk – taken more or less seriously by policymakers [27] – but also about the negative economic consequences if it runs into trouble. The bank already will have had this structural power before the acquisition of its rival, but with its new size and as the only bank of this size remaining in the country it is likely that the government will be careful about regulating to its disadvantage. The question is also to what extent the bank will be held to account. Of course, it is debatable what regulation is to the economy’s and country’s disadvantage. This is where the suggestion that structural power is mediated by ideas and agency is useful: it only works if government actors believe in the structural power threats.[28] And this is indeed where opinions might diverge. Proponents of a liberal market economy would argue that less regulation is better for business and wider society. But we saw that it was partially regulatory failures that led to Credit Suisse’s demise. Strong anti-financial crime measures and other regulatory efforts seem like a prudent approach in light of the current situation and should be of benefit rather than to the detriment of the economy. Policymakers and regulators might also hold this view. Indications for this came from a number of votes in the Swiss National Council in early May 2023. A majority adopted a prohibition of bonus payments to the highest managers of systematically relevant banks. The Council also adopted two other demands made by the social-democratic party SP: higher capital requirements for large globally active banks and effective sanctions against fallible financial institutions.[29]

The takeover of Credit Suisse was pushed through to avert a financial crisis. While the new giant UBS poses its own risks – financial risks but also political ones – the shock of Credit Suisse’s failure might lead to policymakers adopting a stricter approach to regulating banks. Still, UBS’ monopoly power and structural importance for the economy mean that the Swiss government needs to put in place strong safeguards to ensure it won’t regulate in the bank’s favor to the detriment of the public. Transparency about policy processes will be key. The failure of Credit Suisse should also be a wake-up call for banks to put in place stronger due diligence and anti-financial crime measures and be more prudent about high-risk business.


[1] Allen, Matthew (2023): Why a monster UBS bank scares Switzerland., 23/03/2023. URL: [accessed 17/04/2023].

[2] Allen, Matthew (2023): Credit Suisse agrees to CHF3bn takeover by rival Swiss bank UBS., 19/03/2023. URL: [accessed 17/04/2023].

[3] Salmon, Felix (2023): Why Credit Suisse’s failure was so sudden. Axios, 08/04/2023. URL: [accessed 17/04/2023].

[4] op. cit. 2.

[5] op. cit. 1.

[6] Swissinfo (2023): Up to 35,000 UBS and Credit Suisse jobs at risk., 02/04/2023. URL: [accessed 17/04/2023].

[7] Swissinfo (2023): Swiss prosecutor investigates Credit Suisse takeover., 02/04/2023. URL: [accessed 17/04/2023].

[8] Jones, Sam (2023): Walnuts and conspiracies: Credit Suisse and UBS shareholders vent about takeover. Financial Times, 06/04/2023. URL: [accessed 17/04/2023].

[9] Oltermann, Philip (2023): Switzerland’s national pride dealt heavy blow by the merger of its banking titans. The Guardian, 22/03/2023. URL: [accessed 17/04/2023]; Eugster, David (2023): Credit Suisse: the ‘credit locomotive’ has run out of steam., 22/03/2023. URL: [accessed 17/04/2023].

[10] op. cit. 9.

[11] op. cit. 9.

[12] Makortoff, Kalyeena & Pegg, David (2022): Crooks, kleptocrats and crises: a timeline of Credit Suisse scandals. The Guardian, 21/02/2022. URL: [accessed 17/04/2023].

[13] op. cit. 9.

[14] op. cit. 9.

[15] Elliott, Larry (2023): Silicon Valley Bank’s collapse will not be a one-off – a banking crisis was long overdue. The Guardian, 19/03/2023. URL: [accessed 17/04/2023].

[16] op. cit. 8.

[17] op. cit. 9.

[18] op. cit. 1.

[19] Jones, Sam (2023): UBS shareholders line up to question Credit Suisse deal at AGM. Financial Times, 05/04/2023. URL: [accessed 17/04/2023].

[20] op. cit. 1.

[21] op. cit. 9.

[22] Hearn, Denise & Meagher, Michelle (2022): Stakeholder Capitalism’s Next Frontier: Pro- or Anti-monopoly? Balanced Economy Project & American Economic Liberties Project, April 2022, p. 6.

[23] Serenelli, Luigi (2023): Swiss pension funds fear Credit Suisse/UBS deal will knock competition in banking sector. IPE, 20/03/2023. URL: [accessed 17/04/2023].

[24] Ziady, Hanna (2023): Too big for Switzerland? Credit Suisse rescue creates bank twice the size of the economy. CNN, 24/03/2023. URL: [accessed 21/05/2023].

[25] UNDP (2021): Regional Human Development Report 2021: Trapped: High Inequality and Low Growth in Latin America and the Caribbean. UNDP.

[26] Hacker, J. S. & Pierson, P. (2002): ‘Business power and Social Policy: Employers and the Formation of the American Welfare State.’ Politics and Society, 30(2), pp. 277–325. doi: 10.1177/0032329202030002004; Fairfield, T. (2015): ‘Structural power in comparative political economy: perspectives from policy formulation in Latin America.’ Business and Politics, 17(3), pp. 411–441. doi: 10.1515/bap-2014-0047.

[27] Sticher, Etienne (2023): «Arena» – FDP-Noser: «UBS kann die Schweiz nicht verlassen»., 15/04/2023. URL: [accessed 17/04/2023].

[28] Bell, Stephen & Hindmoor, Andrew (2017) ‘Structural Power and the Politics of Bank Capital Regulation in the United Kingdom.’ Political Studies, 65(1), pp. 103–121. doi: 10.1177/0032321716629479.

[29] SP (2023): Grosserfolg! Nationalrat stimmt endlich SP-Forderung nach Boni-Verbot zu. SP Medienmitteilungen, 02/05/2023. URL: [accessed 21/05/2023].

Suggested Citations

Bluebook: Monopolisation and Structural Power: Political Implications of UBS’ Takeover of Credit Suisse, CORPORATE CRIME OBSERVATORY, (June 8, 2023),

Harvard: Gronwald, V. (2023) ‘Monopolisation and Structural Power: Political Implications of UBS’ Takeover of Credit Suisse’. Corporate Crime Observatory. Available at:

OSCOLA: Victoria Gronwald ‘Monopolisation and Structural Power: Political Implications of UBS’ Takeover of Credit Suisse’, (Corporate Crime Observatory, June 2023), <>

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