Switzerland’s Two Largest Banks To Combine

UBS, Switzerland’s largest bank, has agreed to acquire its troubled competitor, Credit Suisse, for more than $3 billion in response to the recent financial market instability affecting institutions worldwide, according to The Wall Street Journal. The Swiss National Bank has praised the move as a measure to maintain financial stability and protect the country’s economy. The transaction’s specifics are not entirely clear, but Swiss regulators have worked to hasten the process by changing laws to avoid a shareholder vote. The Swiss National Bank will also offer a loan of up to 100 billion Swiss francs ($108 billion) to facilitate the takeover, and the Swiss government has pledged to cover about 9 billion francs ($9.7 billion) worth of potential losses of assets to be acquired by UBS.

Swiss President Alain Berset praised the transaction, citing its importance to international finance. Credit Suisse is one of thirty “systemically important” banks identified by the Financial Stability Board, and its shares have plummeted by 75% over the past year. Last week, Credit Suisse received a bailout of 50 billion francs ($54 billion) from the Swiss central bank, which did not fully reassure investors. The purchase price reported on Sunday is less than half the 7.4 billion francs Credit Suisse was worth at the close of trading on Friday.

Credit Suisse has nearly 167 years of history with about 50,000 employees, while UBS boasts approximately 74,000 workers around the world. This news following the collapses of Silicon Valley Bank, Signature Bank, and Silvergate Bank this month as the U.S. federal government intervened to protect depositors. Treasury Secretary Janet Yellen has assured Congress that the U.S. financial system “remains sound.” Meanwhile, billionaire investor Warren Buffett has reportedly discussed providing support for the U.S. regional banking sector with Biden administration officials.

“From Switzerland’s Two Largest Banks To Combine“

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