During yesterday's special session, the Council of States lived up to its reputation as the more moderate of the two Swiss parliamentary chambers. Emotions in the National Council ran high during the evening, with a clear majority voting against the government's motions.

The National Council's rebuff of the federal government's guarantees of 109 billion Swiss francs for the merger of UBS and Credit Suisse mainly resulted in prolonging the debate, at least for the time being. Now the reconciliation process begins to amend the bill so it is palatable for both chambers and can be submitted for approval. If the process is unsuccessful, the bill will fail.

Still, a rejection of the bill wouldn't have any consequences for the takeover of Credit Suisse by UBS, because the commitments made by the federal government through emergency legislation are legally binding.

Opposition from the Wings

The rejection in the National Council was a foregone conclusion. The SVP, SP, and the Greens had already spoken out against the motion in advance, each setting their conditions to be met for approval.

Some of the demands were formulated in review motions. These included a review of the Banking Act, an examination of the possible culpability of former and active managers of Credit Suisse, and an investigation into the practical applicability, effectiveness, and meaningfulness of the too-big-to-fail rules. The conservative SVP pushed through a demand for measures to ensure competition despite the merger, although motions calling for a discussion on binding proposals did not pass.

A Clear Rejection

The results came shortly before midnight when the vote for supplementary credit was rejected by a vote of 102 votes to 71 with 2 abstentions. The framework conditions for the use of the funds were also rejected by a similar ratio of votes.

In the afternoon session, the Council of States approved both the credits and the framework conditions.

The National Council's «no» vote is to be understood primarily as a rebuke to the Federal Council and the finance delegation, as political observers agree.