UBS to buy crisis-hit bank Credit Suisse in bid to avoid financial chaos
Banking giant UBS will buy its ailing rival Credit Suisse, in a deal accommodated by the Swiss government to avoid further chaos in markets after a series of high-profile financial failures.
Credit Suisse got a £45bn emergency loan from Switzerland’s central bank earlier this week after its shares plummeted amid investor fears.
Swiss market watchdog Finma approved the takeover, which came after crunch talks between ministers and bank bosses who wanted assurances from the government.
Sources familiar with the negotiations told FT that there was limited contact between the two banks, with the terms heavily influenced by the Swiss National Bank and Finma.
Credit Suisse is one of 30 so-called systemic global banks considered important to the global finance structure. Its troubles are expected by industry experts to have a knock-on effect for world banking.
At least two major banks in Europe are examining scenarios of contagion in the continent’s banking sector and are looking to the Federal Reserve and the ECB for stronger signals of support, two senior executives close to the discussions told Reuters.
The fallout from the crisis of confidence in Credit Suisse Group AG and the failure of two US banks could ripple through the financial system next week, the two executives separately told Reuters on Sunday.