Banker Tries to Ease Fears on New EC Plan : Credit Suisse’s Chairman Sees No Barriers to Trade
Rainer E. Gut was posing for a photographer at the Biltmore Hotel in downtown Los Angeles on Wednesday when a curious bystander asked one of Gut’s associates if the distinguished-looking man was a movie star. The onlooker seemed disappointed by the negative answer.
Gut laughed as he told the story later in his suite at the Four Seasons Hotel a block outside of Beverly Hills. This is, after all, the home of the movies.
At home in Zurich, Switzerland, the 56-year-old Gut is a star of a different sort. As chairman of Credit Suisse, he is one of the three or four most powerful bankers in his country and a prominent member of the European Bankers Roundtable.
In the latter role, he serves as an adviser to the European officials who are planning the creation of a single, integrated market among the 12 countries of the European Communities in 1992.
The 12 nations have pledged to eliminate all barriers to free movement of people, capital and goods, creating a single market of 320 million consumers. The plan has sparked concern in the United States that the new EC will simultaneously erect barriers to interfere with the ability of Americans to compete with European firms.
‘Bargaining Position’
Gut came to Los Angeles partly to soothe those fears, while offering a dose of caution about potential negatives in a unified Europe for the United States and for Switzerland, which is not among the 12 nations of the EC.
“As it stands, the EC program is not designed to erect new walls to keep other countries out,” Gut said in a speech at the Biltmore to the Town Hall of California, an educational forum for business and academic leaders. “Recent announcements, however, can be interpreted as suggesting a move away from the liberal philosophy originally adopted. It remains to be seen whether this is really a change of heart or just the EC taking up a bargaining position.”
More serious for American business, he said, will be the stronger worldwide competition from the EC and the potential effect on the U.S. balance of trade.
At the same time, he said in his speech and a later interview, a unified Europe will offer American exporters and multinational firms a more efficient means of tapping the new market because distribution and production costs in Europe can be trimmed.
Chairman Since ’83
More than most European bankers, the Swiss-born Gut is in a position to understand American fears because he spent many years working in the United States.
In the early 1960s, he was the North American representative of Union Bank of Switzerland and then became a partner at Lazard Freres, the New York investment bank. He also was chief executive of Credit Suisse’s U.S. investment banking affiliate in New York.
In 1973, he returned to the bank’s home office in Zurich and began an ascent on the corporate ladder that culminated with his elevation to chairman in 1983.
His U.S. experience has helped increase Credit Suisse’s U.S. business, including a major role in financing alternative-energy projects in California. Industry analysts said Gut was instrumental in the Swiss bank’s recent bid to increase its decade-old stake in First Boston, one of New York’s premier investment banks.
First Boston confirmed in late August that it is discussing a possible merger with Financiere Credit Suisse-First Boston that would create a private company. Credit Suisse and First Boston are currently partners in the European investment bank.
In his post-speech interview, Gut declined to discuss progress in the talks except to say that the matter will be decided ultimately by financial industry regulators in both countries.
