UBS to take over Credit Suisse to stem global crisis of confidence
2023.03.19 15:01
© Reuters. UBS Group and Credit Suisse logos are seen in this illustration taken March 18, 2023. REUTERS/Dado Ruvic/Illustration
BERN (Reuters) -UBS will take over Credit Suisse, Swiss authorities said on Sunday, in a deal to combine Switzerland’s top two banks designed to contain a widening crisis of confidence in global finance.
The deal includes 100 billion Swiss francs ($108 billion) in liquidity assistance for UBS and Credit Suisse.
Switzerland’s regulator FINMA said that there was a risk that Credit Swiss could have become “illiquid, even if it remained solvent, and it was necessary for the authorities to take action”.
Credit Suisse, a 167-year-old bank, has been the biggest name ensnared in market turmoil unleashed by the recent collapse of U.S. lenders Silicon Valley Bank and Signature Bank (NASDAQ:), forcing it to tap $54 billion in central bank funding last week.
“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,” the Swiss central bank said.
Authorities had been scrambling to rescue Credit Suisse, among the world’s largest wealth managers, before financial markets reopened on Monday.
UBS and Credit Suisse are both in a group of the 30 global systemically important banks watched closely by regulators, and Credit Suisse’s failure would ripple throughout the entire financial system.
FINMA said on Sunday that it had approved the takeover.
($1 = 0.9280 Swiss francs)
