A sign on the roof of the Credit Suisse Group AG headquarters in Zurich, Switzerland, on Thursday, March 16, 2023. Credit Suisse tapped the Swiss National Bank for as much as 50 billion francs ($54 billion) and offered to repurchase debt, seeking to stem a crisis of confidence that has sent shockwaves across the global financial system. Photographer: Francesca Volpi/Bloomberg via Getty Images
Francesca Volpi | Bloomberg | Getty Images
UBS agreed to buy its embattled rival Credit Suisse with Swiss regulators playing a key part in the deal as governments looked to stem a contagion threatening the global banking system.
“With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” read a statement from the Swiss National Bank, which noted the central bank worked with the Swiss government and the Swiss Financial Market Supervisory Authority to bring about the combination of the country’s two largest banks.
related investing news
The Swiss National bank pledged a loan of up to 100 billion ($108 billion) Swiss francs to support the takeover. The Swiss government also granted a guarantee to assume losses up to 9 billion Swiss francs from certain assets over a preset threshold “in order to reduce any risks for UBS,” said a separate government statement. No amount was given in the initial statement.
The UBS deal was rushed together before markets reopened for trading Monday after Credit Suisse shares logged their worst weekly decline since the onset of the coronavirus pandemic. The losses came despite a new a loan of up to 50 billion Swiss francs ($54 billion) granted from the Swiss central bank to halt the slide and restore confidence of the bank’s counterparties in the financial markets.
Credit Suisse had already been battling a string of losses and scandals, and the last two weeks sentiment was rocked again as banks in the U.S. reeled from the collapse of Silicon Valley Bank…
Read the full article here
