The Limited Times

Now you can see non-English news...

UBS bank agreed to pay $2 billion for Credit Suisse


It followed a weekend of intense negotiations between the two banks, the government, the central bank and the regulator.

Swiss bank UBS

has agreed to buy ailing rival Credit Suisse for just over $2 billion

, following a weekend of intense negotiations between the two banks, the government, the central bank and the regulator, the newspaper reported today. Financial Times.

As part of the deal, the parties involved have agreed

to amend the law

to prevent this purchase decision from being put to a vote by UBS shareholders, according to the source.

The Swiss Executive has announced a press conference in the next few hours, supposedly with the intention of announcing the agreement, for which the purchasing bank would have

required several guarantees.

While UBS was valued this Friday at the market close at 56,000 million,

its competitor was around 8,000 million capitalization


That means that UBS will pay almost a quarter of what it was worth on the Credit Suisse Stock Exchange just a couple of days ago.

UBS was valued this Friday at 56,000 million and its competitor was around 8,000 million capitalization.

Photo Reuters

The pact creates one of the largest banks in Europe

, and serves to put an end to the confidence crisis that was bleeding Credit Suisse dry.

The Zurich-based entity already saw deposit leaks in the last quarter of 2022.

Although the Swiss National Bank insisted this week that it was broadly meeting capital and liquidity requirements, customer fears that the bank's situation would worsen with their savings inside was fueling further money flight amid the tidal wave of reports. negative.

That has made Credit Suisse's continuation on its own untenable.

The brand has gone from being synonymous with reliability

to becoming a source of suspicion

, damaging the reputation of the once unimpeachable Swiss bank, and becoming a liability to the entire industry.

The fusion

The merger of the two banking giants, which are part of the group of 30 banks considered key in the global financial system, should be completed and announced in time for the opening of the Asian markets.

The hope is that the announcement

will be enough to prevent a general panic.

The banking sector has been under strain since major central banks raised rates sharply in an attempt to control inflation.

Many institutions failed to prepare after years of access to cheap money.

The failure of Silicon Valley Bank in the United States and other regional banks increased investor anxiety and

caused the crisis in other entities considered weak.

This is the case of Credit Suisse, which has been immersed in various scandals for two years that it failed to resolve despite the efforts of its management, which announced a three-year restructuring plan.

The Swiss central bank on Wednesday announced a 50 billion Swiss franc ($54 billion) bailout package after a black day on stocks but the move only gave the bank a brief respite.


Regulators and the federal government

acted under immense pressure from

Switzerland's main economic partners to clean up the situation before it spread to the entire world.

According to the Financial Times and Blick, the bank's clients withdrew 10 billion Swiss francs

($10.8 billion)

in deposits in a single day late last week.

According to Bloomberg, UBS has demanded that the government bear legal costs and potential losses, which could run into billions of francs.

UBS, which took several years to recover from the 2008 financial crisis and a massive state bailout,

is beginning to reap the rewards of its efforts.

That is why it took a lot of effort on the part of the authorities before the bank's management agreed to take on the role of rescuer for Credit Suisse.

On Sunday, the Swiss bank employees' union "demanded" the involvement of the social partners in the discussions, given the "huge" stakes in the purchase, which could mean massive job losses.

Source: EFE


look also

Banking crisis: wobbles on the tightrope of the markets

Silicon Valley Bank parent company files for bankruptcy

Source: clarin

All news articles on 2023-03-19

You may like

News/Politics 2023-03-19T18:56:36.273Z
News/Politics 2023-03-21T18:22:27.518Z
Business 2023-06-05T06:41:26.731Z

Trends 24h

News/Politics 2023-06-05T20:51:58.429Z
News/Politics 2023-06-06T05:51:51.763Z
News/Politics 2023-06-06T02:51:17.787Z


© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.