ZURICH/BERN According to media reports, the Swiss supervisory authorities are urging UBS to take over its smaller local rival. State guarantees are a prerequisite for a deal that will be frantically negotiated over the weekend. The Swiss government in Bern should issue a guarantee to cover the risks associated with the takeover, it said. The aim is to reach an agreement by Monday morning before the international stock exchanges open.
A takeover of Credit Suisse (CS) by UBS would be the most significant bank merger in Europe since the financial crisis. For the central bank, financial regulator and government of Switzerland, it is also about preventing a major global banking crisis. The government is under considerable pressure to stabilize the situation. Because Credit Suisse is one of the 30 global systemically important banks whose failure would shake the international financial system.
The Financial Times wrote that the Swiss government could take emergency measures to speed up the merger process. You could, for example, shorten the period of six weeks that is actually necessary for the consultation of shareholders in the event of a takeover.
Credit Suisse was already battered by scandals and mismanagement when it fell into another downward spiral after the collapse of the US bank Silicon Valley Bank (SVB). It received a loan commitment from the Swiss National Bank in the amount of CHF 50 billion (almost EUR 51 billion), but was only able to stop the downward trend in the share price temporarily.
The Swiss newspaper “Tages-Anzeiger” sees the takeover of the bank by UBS as the only way out. Customer trust is completely gone, and the outflow of money is immense. Several international banks have restricted their business with Credit Suisse. The loan of CHF 50 billion from the National Bank is of no use either. “Everyone is afraid of collapsing,” said the paper.
