Parliament symbolically rejects Credit Suisse deal

Lawmakers in Switzerland's Parliament have symbolically rejected a deal brokered by the government last month, in which investment bank UBS took over troubled rival Credit Suisse, thanks largely to guarantees from the country's central bank.

The deal, reached on March 19,saw UBS assume control of the 167-year-old institution for $122 billion, thanks to a weekend of frantic activity after the bank got into trouble.

Fearing Credit Suisse's full meltdown and wider financial chaos, the Swiss government ensured the deal was in place.

The deal, which involved a$111-billion liquidity lifeline from the Swiss National Bank and an$11-billion guarantee from the Swiss government against any losses UBS may incur because of the takeover, was debated by lawmakers on Wednesday.

Alain Berset, president of Switzerland's federal council, urged them to support it, saying: "Time was running out and the situation was deteriorating from hour to hour."

He said the bank would surely have failed on either March 20 or March 21 if the government had not acted, causing "an international financial crisis with devastating effects for our country".

But lawmakers in the lower house of Switzerland's Parliament overwhelmingly rejected the intervention, by 103 votes to 71, with 8 abstaining.

Their opposition changed nothing, however, because the Swiss government intervened under an emergency law and did not need parliamentary approval.

After the symbolic vote, Switzerland's finance ministry said: "This decision has no impact on the takeover of Credit Suisse decided on March 19."

German public broadcaster Deutsche Welle, or DW, said the Swiss government added that "the finance delegation of the Swiss Parliament" gave its "binding approval" to the deal "on behalf of Parliament, due to the urgency of the matter".

DW said the government's action without first seeking approval from lawmakers seems, however, to have angered many ordinary people because Swiss voters are used to being consulted on important issues through frequent referendums.

And, despite the vote's lack of teeth, Eva Herzog, a lawmaker in the Swiss Parliament's upper house, told The Associated Press news agency that a rejection of the government's actions would "really send a bad signal".