UBS, the first Swiss bank, is in talks for the total or partial takeover of Credit Suisse, its rival in great difficulty, with the express blessing of the Swiss regulatory authorities, the Financial Times said on
Friday
.
Swiss regulators - the central bank (SNB) and the financial market watchdog (Finma) - told their American and British colleagues that the takeover by UBS was
"their plan A
" to stop the crisis of confidence from which Credit Suisse is suffering, writes the
Financial Times
, citing an unnamed source with knowledge of the talks.
The Swiss central bank
“wants a simple solution before the markets open on Monday”
, assures the business daily, which recognizes that it is not certain that an agreement can be found.
UBS wants to assess what risks a full or partial takeover of its rival could pose to its own business, another anonymous source told the FT.
Read alsoFirst Republic Bank: behind the scenes of a $30 billion bailout
Credit Suisse has been in turmoil for two years, but things accelerated on Wednesday when investors - shaken by the bankruptcy of Silicon Valley Bank in the United States - sold off shares of the second Swiss bank.
The stock was worth just 1.55 Swiss francs at the height of the storm, an all-time low.
Credit Suisse is considered a weak link in the banking sector since a series of scandals and a restructuring plan that is struggling to convince.
Reassure the markets
At the end of the day on Wednesday, the market capitalization of the Zurich bank was less than 7 billion Swiss francs, a paltry sum for one of the 30 banks in the world considered too big to let them fail.
On Wednesday evening, after being silent all day, the Swiss central bank offered verbal support and offered liquidity.
On the night of Wednesday to Thursday, Credit Suisse borrowed 53 billion Swiss francs from it to give itself a breath of fresh air and move forward in its restructuring.
For the SNB, it was a matter of reassuring markets around the world.
It worked for a while.
Investors pushed the stock higher, but it was only a brief respite: the stock fell more than 8% on Friday.
This bank, founded in 1865, which was a key player in the Swiss economic miracle, is only worth 8 billion Swiss francs on the stock market, when UBS is worth 56.6 billion.
