UBS to acquire Credit Suisse
On Sunday evening, the rescue for the ailing major bank Credit Suisse became apparent. UBS will take over its rival, the SNB supports the deal with liquidity support.
In a marathon negotiation lasting several days, representatives of Credit Suisse and UBS, the Swiss National Bank (SNB), the government and the financial regulator Finma had worked on a solution to save the crisis-ridden Credit Suisse. It was found on Sunday evening: UBS will take over its competitor for CHF three billion. The SNB is providing extensive liquidity support for both banks. Credit Suisse's current chairman of the board, Colm Kelleher, will become president of the new bank, while UBS head Ralph Hamers will become CEO. According to unconfirmed media reports, 10,000 jobs could be cut in the course of the merger.
CHF 100 billion loan
According to the SNB, both banks have unrestricted access to the existing facilities, through which them at the SNB can draw on liquidity. In addition, Credit Suisse and UBS can a liquidity assistance loan secured with a bankruptcy privilege in the amount of of up to CHF 100 billion in total, this is based on the emergency ordinance of the Federal Council. In addition, the SNB may Credit Suisse a liquidity assistance facility secured by a default guarantee from the Swiss Confederation.grant loans of up to CHF 100 billion.
UBS initially rejected merger
Last week, Credit Suisse found itself in difficult waters, partly as a result of international banking turmoil. There had been early speculation about a takeover by UBS, but the latter had initially rejected this. The merger of Credit Suisse and UBS is the most significant bank merger in Europe since the financial crisis 15 years ago. It will create one of the largest systemically important financial institutions in Europe. Credit Suisse is one of the world's largest asset managers and is one of the 30 global systemically important banks whose failure would shake the international financial system.
"With the takeover of Credit Suisse by UBS, the Group was able to achieve a significant increase in this extraordinary situation, a solution to safeguard financial stability and protect the Swiss economy can be found," the SNB said in a communiqué. (ah)
