UBS Buys Stricken Credit Suisse But Doubts Remain
Monday, 20th March 2023
The Swiss government has forced through the takeover of stricken bank Credit Suisse by rival UBS for almost $3.25bn (£2.65bn) as reported by The Guardian amid fears that a failure to protect depositors would trigger a new global banking crisis.
After a weekend of frantic talks, the Swiss government and the banking regulator brokered a deal once it became clear a $54bn loan to Credit Suisse from the Swiss central bank had failed to halt the precipitous slide in its share price.
“The takeover of Credit Suisse by UBS is the best solution” in the current situation, said the Swiss president, Alain Berset.
He said the takeover was made possible after the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank agreed to support the deal.
An £8bn insurance scheme to protect UBS from losses was described by Karin Keller-Sutter, the Swiss finance minister, as “like a backstop and insurance that only comes into effect if certain losses occur”.
Private investors who supported Credit Suisse with $16bn of credit were also expected to be wiped out by the deal.
Meanwhile, The Telegraph has today reported that doubts are being raised over the rescue amid bond market tumble.