The head of the Swiss financial regulator has defended the rescue of Credit Suisse through a takeover by rival bank UBS as the solution with the least risk of creating a wider crisis and damaging Switzerland’s standing as a financial centre.

The merger was “the best option” and one that “minimised risk of contagion and maximised trust”, said Urban Angehrn, chief executive of the Swiss Financial Market Supervisory Authority, or FINMA.

Mr Angern said two other options — a takeover by the Swiss government or putting Credit Suisse into insolvency proceedings — had serious drawbacks.

Insolvency would have left the functional parts of Credit Suisse in operation as a Swiss-only bank but one with a “damaged reputation” through bankruptcy, he told reporters in the Swiss capital of Bern.

A temporary takeover by the Swiss government would have exposed taxpayers to the risk of losses.

“One can well imagine, what devastating effect the insolvency of a big wealth management bank of Credit Suisse AG would have had on Swiss private banking,” Mr Angern said. “Many other Swiss banks could have faced a bank run, just as Credit Suisse did itself in the fourth quarter.”

The globe’s biggest banks, including Credit Suisse, are required to submit emergency plans for winding them up if they fail, a measure arrived at through international negotiations aimed at preventing a repeat of the 2008 global financial crisis triggered by the failure of globally connected US investment bank Lehman Brothers.

Triggering such an emergency plan “would have achieved its immediate aim” of preserving payments and supporting the economy in Switzerland, Mr Angehrn said.

“But the damage to Switzerland as a place to do business, to the reputation of Switzerland, to tax revenue and jobs, would have been enormous,” he added.

Swiss government officials, including the financial regulator, hastily orchestrated a 3.25 billion dollar takeover of Credit Suisse by UBS on March 19 after Credit Suisse’s stock plunged and jittery depositors quickly pulled out their money.

Authorities feared that a teetering Credit Suisse could further upset global financial markets following the collapse of two US banks.

Credit Suisse shareholders did not get to vote on the deal after the government passed an emergency ordinance to bypass that step. Shareholders aired criticisms of Credit Suisse’s struggles at what may have been the bank’s last annual general meeting on Tuesday.

UBS faces shareholders at its annual meeting on Wednesday.