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Karin Keller-Sutter: the finance minister behind the rescue of Credit Suisse

Swiss politicians are stealthy by design.

But last weekend, as Credit Suisse, Switzerland’s second-largest bank, and a national institution, tottered on the brink of failure, Bern’s political leadership was uncomfortably thrust into the limelight.

Karin Keller-Sutter has been in charge of the Swiss finance ministry for just two months. She now finds herself dealing with Switzerland’s biggest financial crisis in more than a decade.

In a few short days she has become a lightning rod for anger among certain sections of an astonished Swiss public, and the bête noire of angry international bondholders, vaporised by the rescue plan she pulled together, in which Credit Suisse’s fierce rival, UBS, was induced into a shotgun marriage using billions in taxpayer guarantees.

For supporters, she has by contrast, with characteristic unflappability, forged a miraculous rescue deal combining two of the world’s most complicated financial institutions in just 48 hours.

“Of course, [she] will be heavily criticised, but the reality is that the people involved were handed an extremely difficult situation, with systemic implications, and they had almost no time to solve it,” said the head of one Swiss private bank who watched the rescue of Credit Suisse unfold with disbelief.

Keller-Sutter, or KKS as she is known to colleagues, is one of the seven federal councillors who sit at the apex of Switzerland’s labyrinthine political system, ruling collectively in place of a prime minister or a president.

For some time Keller-Sutter, a native of the canton of St Gallen, in Switzerland’s east, has been the most popular of them with the Swiss public.

Throughout her career, Keller-Sutter has stood for the FDP, Switzerland’s economically liberal party of business, whose existence stretches back to the bourgeois heyday of the country’s industrial miracle in the late 19th century.

Credit Suisse, founded by the liberal politician and industrialist Alfred Escher, was long regarded as the FDP’s house bank.

The decision to use taxpayer money to bail out a commercial entity, even one with such close historic ties to her party, nevertheless “contradicts everything she stands for, everything she believes in”, the broadsheet newspaper Tages-Anzeiger railed.

Close allies say Keller-Sutter inherited some of her attitude towards business, particularly the importance of taking responsibility and keeping one’s house in order, from her parents, who ran a local restaurant. Though she may harbour strong views on Credit Suisse’s management on such points, another very Swiss quality she channels — a poised sangfroid — means she would almost certainly never show it, said one former colleague.

Many in the Swiss business community have long respected Keller-Sutter.

“She combines financial expertise with a profound understanding of the challenges businesses face,” said Etienne Jornod, chair of the NZZ media group, one of Switzerland’s biggest newspaper publishers. Keller-Sutter used to sit on the NZZ board, as well as those of several other Swiss businesses.

“She was well known for her strong, well-considered advice as well as for her determination,” Jornod recalled.

By training, Keller-Sutter is an interpreter.

A native German speaker, she graduated from the Zurich University of Applied Sciences in 1989, fluent in English and French. She later trained as a secondary school teacher. It was while on a term of study in Montreal that her politics — pro free markets and small government — became fixed.

A profile of her by Swiss public television observed in 2018: “Interpreters are service providers, they are at their best when their person disappears behind the matter at hand.”

Her modesty and ability to listen have indeed been a hallmark of her career. But so too have her tenacity and convictions. Few know that she boxes in her spare time, and avidly follows the sport.

She bucked the pro-business FDP line during the coronavirus pandemic, supporting stronger social restrictions in Federal Council debates — perhaps informed by the first-hand experiences of her husband, Morten Keller, a doctor in charge of the Zurich city health department.

“Like my dog, I won’t be muzzled!” ran her first-ever election slogan for Wil town council in 1992. Women in Swiss politics were a rarity at the time. Wil is 25km from the canton of Appenzell Innerrhoden, where just two years before she was elected, women received the right to vote.

Keller-Sutter rose steadily up the local political ladder in St Gallen, with what colleagues at the time recall as a remarkable work ethic, and by 2011, was elected to Bern as one of the two cantonal councillors of state — the equivalent of a US senator. By 2017, she was elected president of the Council of States, the upper chamber of the Federal Assembly.

Keller-Sutter commands respect from across the political spectrum.

“We have completely different political perspectives but she is very open, and always has a very clear line,” said Cédric Wermuth, co-president of Switzerland’s Social Democratic party. “She is pro-business. Pro-banking. But reliable and honest and doesn’t play games.”

On the eve of her potential election in 2018 to the Federal Council, Switzerland’s highest office, Bern insiders recall an anecdote about her attendance at the Olma, a huge traditional agricultural festival in St Gallen famous for its Säulirennen — piglet race — and, incidentally, the attendance of Bern power brokers competing to demonstrate their earthy credentials.

While other politicians posed for pictures, piglets in arms, Keller-Sutter ducked the parade, having told her brightly clothed ceremonial beadle — an official that comes as a perk of the upper house presidency — to stay at home, and snuck off into the crowd, lest she appeared too prominent, and too confident of victory.

A different challenge now awaits her, however, in which very public leadership will be required to ease the fears and assuage the anger of a country still reeling from last weekend’s events.

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