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		</div><p>A group of Credit Suisse investors has sued Swiss financial regulators after a government-engineered takeover of the struggling bank by rival UBS left it with billions in losses.</p>
<p>The investors are contesting an order by the Swiss Financial Market Supervisory Authority (Finma) that wiped out about 16 billion Swiss francs (about £13.9 billion) in higher-risk Credit Suisse bonds as part of an emergency rescue last month, lawyers said on Friday.</p>
<p>The hastily arranged, £2.6 billion deal prevented the downfall of Switzerland’s second-largest bank after its stock plunged and customers rushed to pull out their money amid fears about long-running troubles at Credit Suisse and upheaval in the global financial system after the collapse of two US banks.</p>
<p>“Finma’s decision undermines international confidence in the legal certainty and reliability of the Swiss financial centre,” said Thomas Werlen, managing partner in Switzerland for law firm Quinn Emanuel Urquhart &#038; Sullivan.</p>
<p>The firm filed the complaint in Swiss federal court on Wednesday on behalf of investors holding more than 4.5 billion Swiss francs (around £4 billion) in the higher-risk bonds.</p>
<p>“We are committed to rectifying this decision, which is not only in the interests of our clients but will also strengthen Switzerland’s position as a key jurisdiction in the global financial system,” Mr Werlen said in a prepared statement on Friday.</p>
<p>Finma declined to comment but has defended the decision to wipe out bondholders.</p>
<p>Typically, shareholders face losses before those holding bonds if a bank goes under.</p>
<p>Following the 2008 financial crisis, European financial regulators use a special type of bond that is designed to provide a capital cushion to banks in times of distress.</p>
<p>But those bonds are designed to be wiped out if a bank’s capital falls below a certain level.</p>
<p>Swiss regulators say contracts for these so-called Additional Tier 1 (AT1) bonds issued by Credit Suisse show they could be written down in a “viability event”, particularly if the government offers extraordinary support.</p>
<p>That happened after the Swiss executive branch passed emergency measures that provided billions in guarantees for the deal and allowed regulators to order a writedown of the bonds, Finma said.</p>
<p>The emergency rescue plan allowed the government to push through the deal without shareholder approval.</p>
<p>Regulators also have called the takeover “the best option” that offered the least risk of fanning a wider crisis and damaging Switzerland’s standing as a financial centre.</p>
<p>The lower house of Swiss parliament, in a symbolic vote last week, rebuked the rescue after the central bank and government splashed out more than 200 billion Swiss francs (£180.7 billion) in guarantees.</p>
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