The venue: A secret location in Zurich, the financial heart of Switzerland, on Saturday, March 18.
Seven people are seated around a rectangular table.
Urban Angehrn, the boss of Finma, the Swiss financial regulator, and Thomas Jordan, chairman of the Swiss National Bank, the country's central bank, are seated next to each other.
Facing them across the table are UBS's chairman, Colm Kelleher, and its chief executive, Ralph Hamers.
Six feet away from them, adjusting their ties, sit Credit Suisse Group AG Chairman Axel Lehmann and CEO Ulrich Koerner. They smile at Kelleher and Hamers.
The CS executives are confident. They are happy to negotiate with people from their former home, UBS. They tell themselves that fraternity will prevail. "It's good to talk to people who speak and understand your language," Lehmann tells Koerner.
At the end of the table sits the only woman in the room: Karin Keller-Sutter, Switzerland's finance minister, in office less than three months.
Since March 14 the markets have been buzzing with rumors that the crisis of confidence in the banking sector, caused by the sudden collapse of Silicon Valley Bank in California, was going to have ripple effects.
The next day Credit Suisse stock closed at an all-time low, forcing the Swiss central bank and Finma to signal that they would not let the systemic bank go down.
A few hours after their statement, Credit Suisse said it had obtained an emergency loan of 50 billion Swiss francs (nearly $54 billion) from the SNB to shore up its liquidity.
The next day, the markets welcomed the announcement -- but new questions arose.
Only One Option
On March 17 there was no longer any doubt that the lifeline would not be enough to reassure investors. That was especially since a note from a JPMorgan analyst added fuel to the fire. The analyst said that a merger between Credit Suisse, which had been shaken by repeated scandals, and its rival and compatriot, UBS, was the best option to put an end to the ordeal of the bank.
All these events appear on a video loop on a screen that Keller-Sutter had installed in the room, so that the participants in the meeting do not forget what is at stake.
Keller-Sutter addresses the group:
"Gentlemen, I have called this emergency meeting so that we can find a solution to put an end to the financial crisis, which is mounting and threatens to ruin all the efforts we have undertaken since 2008 so that our citizens have trust in our banks.
"You know this moment is serious. There is no other way to end this crisis of confidence. The only solution, and I'm talking to you, Mr. Hamers and Mr. Kelleher, is for you to buy Credit Suisse. We won't get out of here until we have an agreement.
"The orders are coming from above, and our friends, the Americans, are waiting for a sign that everything is resolved. I am having sandwiches, water and cold drinks delivered.
-If you want a cigar or a drink, you'll have to work fast to get out of here. The door in the corner leads to a restroom."
Kelleher is next to speak.
"You know our position. We don't want CS. We managed to put our house in order and things are going well for us. We don't need new headaches. We are risk-averse; that's our culture. They love risks; not us. We can't coexist.
Keller-Sutter: "I think you misunderstood me. You do not have a choice. You're going to merge. The decision has been made. We are here to see how to make this marriage possible."
Lehmann tries to interject. Keller-Sutter shushes him.
"You were not asked for your opinion. We will ask you if we need you."
Hamers: "Imagine we say yes. We need Jordan's commitment that the SNB will help us pay any fines related to the CS scandals. They did a lot of questionable things. We don't know whether there are other skeletons waiting to pop out."
Jordan: "I can't do that because it would involve taxpayer money, and given the political environment, there will be a backlash."
Hamers: "If that's your last word, we really can't buy CS."
Kelleher: "Not that we don't want to. We are happy with certain parts, such as Wealth Management and Asset Management and the retail business. But we don't want the investment bank."
Keller-Sutter: "But you can't just take what's good and throw out the rest."
'You and You Have No Say'
Koerner: "Can I say something?"
Keller-Sutter: "You don't understand. Let me say it again: you and you" -- she points to Koerner and Lehmann -- "have no say. You were invited here out of respect for your shareholders and employees."
Lehmann looks at Hamers and Kelleher, hoping for support from them. They ignore his visual pleas.
Kelleher: Let's assume we say yes. We will have to explain all this to our investors and to our board. We need cover to sell them the deal. The SNB must make some sort of gesture."
Hamers: "According to our calculations, the next fines related to ongoing litigation could be over 6 billion Swiss francs. [US$6.47 billion] How do we explain to our shareholders that we took the risk of losing 6 billion? It is not possible. It's insane."
Jordan: "I told you before that we can't commit taxpayer money."
Hamers: "I'm sure you can do something. Just be creative."
Keller-Sutter: "Let's look at the positive side of things. We have already made progress. UBS is ready to buy three units and can take everything else if we provide them with some financial support because of the investment bank."
She turns to and addresses Lehmann and Koerner. "Call the Saudi National Bank and tell them the negotiations are going well."
Saudi National Bank is Credit Suisse's largest shareholder with a 9.9% stake.
After a short break, the talks resume.
Lehmann: "I think it's important for you to remember that we launched a strategic plan a few months ago."
Keller-Sutter: "How many times do you have to be told that we don't care about what you have to say."
She turns to Jordan and Angehrn.
"If UBS acquires the retail business, can it pass on the regulatory level?"
Angehrn: "It is possible, but the new group will have about 30% of the country's domestic loans and deposits. It is to be expected that it will make people talk. Competitors will no doubt make noise in the press."
Keller-Sutter: "What can we do?"
No one answers.
The Americans 'Are on Board'
Jordan: "I talked to my American colleagues. They told me that the new company may have new requirements. Both banks were already considered systemic in Switzerland and for the global financial system.
"Overall, they are on board. Like us, they want to restore confidence very quickly. We're all on the same page and it's in our best interest that it doesn't crash. I'm sure our European and U.K. peers will say the same thing."
Keller-Sutter: "That's good news. All that remains is for us to reach an agreement on the investment bank."
Kelleher: "We want to reduce the size of the investment bank. They took crazy risks. We can't afford to have them taking us down."
Hamers: "Our strategy is to focus on wealthy clients. Crazy risks are not really our thing anymore."
Koerner: "If I may, we have drastically reduced those costs."
Keller-Sutter intervenes, annoyed.
"This is really the last time because you guys are really starting to piss me off, seriously."
She looks at Hamers and Kelleher and says simply, "Carry on."
Hamers: "If we take the investment bank, we will eliminate thousands of jobs. We have 74,000 employees and CS has 50,000. It's way too much. There will be a lot of duplication."
Kelleher: "OK. Our offer is 1 billion because there's too much risk. The SNB gives us guarantees that they will provide emergency credit lines if things are worse than expected."
Hamers: "In addition, we want a waiver clearly saying that there is no need to ask for a shareholder vote."
Lehmann and Koerner can't hold back any longer.
Lehmann: "1 billion! You are not serious! The market value yesterday was 7.3 billion."
Koerner: "Our shareholders will say no. You must do better."
Kelleher: "It's 1 billion."
Keller-Sutter: "Calm down. We're all going to take a break. You, call Saudi National Bank and give them the price."
The break is over; the talks resume.
Lehmann: "The Saudi National Bank says no. The price is too low."
Kelleher: "Too bad, then."
Jordan: "If you were given liquidity facilities and a financial guarantee to cover possible fines, can you increase the price?"
Kelleher: "Possible. How about 2 billion?"
Lehmann: "No! It's ridiculous!"
Keller-Sutter: "You had to think about it when your employees were doing stupid things. Now you have to take it.
"Gentlemen, we're running out of time. The world awaits us. We cannot disappoint."
'We Have a Deal'
Kelleher: "Our teams tell us that CS's situation is more complicated than it appears. We really can't do more than what you've been told."
Keller-Sutter: "So the only plan B is that we nationalize CS then? This is a scenario that will not be acceptable to anyone. How to even sell it? It is not an option. It would be a disaster."
Jordan: "I think I have a solution. We can grant a backstop of 100 billion to UBS and an envelope of 9 billion in the event of fines, but UBS must increase its price to sweeten the bitter pill to the shareholders of CS."
Hamers: "And the waiver."
Keller-Sutter: "Yes, and the waiver."
Kelleher: "3 billion."
Jordan: "Sounds fair."
Keller-Sutter: "Good. We have a deal."
Kelleher: "We do."
Hamers: "We do."
Kelleher: "We'll let you break the news to the world."
Keller-Sutter: "Everything has already been arranged. Lehmann, Koerner, inform Saudi National Bank."
Most of the executives leave the room to go to the press conference. Only Koerner remains, unable to believe that his efforts to revive Credit Suisse in recent months had just been reduced to nothing.
"3 billion," he repeats to himself, "3 billion."
This is an imaginary scene that draws on facts. The reality is that UBS did not want Credit Suisse. UBS aspires to become a digital bank focused on wealthy clients to whom it will offer financial services.
Credit Suisse, on the other hand, entered the negotiations in a position of great weakness. Last week, the bank recorded about $10 billion of outflows, a figure that reflects the crisis of confidence in the firm. Its clients were abandoning it en masse.
The Swiss government, for its part, wanted to avoid the humiliation of the bankruptcy of a national flagship bank. Such an occurrence would have had indescribable consequences for the country's image and economy.
