1/7 of the Friday closing price - this is heading into the Matt Levine "we will buy your bank, make sure that all your customers are made whole, and give you a Snickers bar in exchange for 100% of the equity" territory
Matt Levine is a treasure.
Wish I could be that deliberately malicious and get promoted for my efforts.
Is there such a mechanism in Switzerland? Because at "a snickers bar", a lot of people wouldn't sell out even though it's better for all their depositors. They may be tempted to roll the dice and hope for a giant win. After all, they get way more upside and it's not their money (primarily) they are risking
The mechanism for "getting paid with a snickers bar" is just a streamlined but still fair version of a restructuring bankruptcy. In a bankruptcy all of the equity gets wiped out and the shareholders no longer have a say in the matters. Morally because they failed to run the company, but also because they positioned themselves to take the greatest gains, and thus should be exposed to absorb the greatest losses. It's not so much specific to any country as it is to the very idea of capitalism / being a shareholder.
The fact that a banking regulator gets involved and orders this or that does not necessarily change the fundamental way in which things would happen to another non-bank corporation. Equity would get wiped out, sometimes together with the least secured credit - see "fulcrum security".
All-In Podcast said that a plausible reason for the Saudi Arabian investor capping at 9.9% was due to government regulations. Deep link : https://www.youtube.com/watch?v=yYwfiqYocc0&t=11m20s
That said, I have no idea if the government rules about owning more than 10% is just a minor inconvenience or A Really Big Deal.