Credit Suisse, Switzerland's second largest lender, clinched an emergency central bank loan early on Thursday of up to $54 billion to shore up its liquidity after its shares fell 24% on Wednesday, when its largest investor said it could not offer any more financial assistance.
The stock jumped 20% on Thursday, but fell 10% on Friday in volatile trade.
The Swiss cabinet held an emergency meeting about the central bank's move on Thursday but gave no public statement after, with most politicians, including Finance Minister Karin Keller-Sutter, tight-lipped.
Among those who did comment, politicians from across Swiss ruling parties backed the Swiss National Bank's (SNB) move to provide liquidity, but put Credit Suisse managers under the spotlight for the scandals and losses that led to a crisis of confidence.
Switzerland, while priding itself on its financial know-how, has few mechanisms for holding top bankers individually responsible for mismanagement, unlike some other financial centres such as Britain where senior managers can face criminal sanctions.
Switzerland's Social Democrats (SP), the second largest party in the lower house of the parliament, called for a wide search into who was responsible for a crisis "everyone should have seen coming".
"Our system hasn't managed to hold those responsible who should be held responsible," SP co-president Cedric Wermuth told reporters on Thursday. "Who knew what, when .... Who knew when we had a systemic problem .... Who should have sounded the alarm when it was necessary?" he asked.
Greens lawmaker Gerhard Andrey said managers should take responsibility and Switzerland should look at its regulations, with the Credit Suisse debacle putting the country "in a very difficult situation".
"It is about the responsibility of top level management and about culture. We don't need more boxes to check. We need another culture," he told Reuters.
Andrey said a year and a half ago he had convinced parliament and the government to rethink regulation and make top executives more accountable, with results due later this year.
"The industry has a trust issue, not because the sector as a whole isn't trustworthy, but a few organizations put it in a very bad position," he said
"This mismanagement led to a situation where we are now."
So far, there hasn't been large-scale public outcry.
"It was foreseeable that the SNB would provide liquidity. That Credit Suisse has problems has been known for a long time," said Martin Staub speaking in central Zurich.
Others expressed their faith in the Swiss banking system. "We are clever with banks," said Diva Bosch, out shopping in central Zurich.
One passerby who declined to give his name said, however: "After all the management mistakes and the huge bonuses, let them collapse. It's over."
SWITZERLAND BEYOND BANKS
Fifteen years after the bailout of rival UBS and subsequent clampdown on baking secrecy, the turmoil at Credit Suisse has put another dent in the Swiss armour of financial stability.
But Switzerland is still the world's largest wealth management centre, according to 2021 study by Deloitte, in terms of competitiveness, size and performance. The financial sector makes up about 9% of Swiss gross domestic product, according to Finance Swiss, and employs 5.5% of the workforce.
The aggregate balance sheet of all banks in Switzerland stood at 5.2 times the size of the country's economy in 2021.
While its big banks are famous, more than 99% of registered businesses in Switzerland are small enterprises with less than 250 staff, and the country has a weighty pharma sector as well as the world's largest food company Nestle.
"It will be harsh for some if Credit Suisse disappears but Switzerland will be just fine," said Stefan Legge, head of tax and trade policy at the University of St. Gallen's IFF Institute for Financial Studies.
"The Credit Suisse crisis is negative for Switzerland, but not enough to damage the reputation of Switzerland on its own. For a complete disaster there would have to be a large group of people losing a lot of money and lots of jobs lost. But the only people who have lost money so far are the shareholders, and they chose to buy stock," he told Reuters.
He believes the damage to the bank's reputation is so severe, however, it will have to change.
"I expect someone to come and take the valuable assets and the rest will die .... They have announced a turnaround so many times, they all failed."
(Additional reporting by John Revill, Reuters television, Writing by Alexandra Hudson, Editing by Mark Potter)
By Alexandra Hudson and Tom Sims