Investment banking giant UBS is said to be close to a deal to take over rival Credit Suisse in a bid to prevent the troubled financial institution from collapsing completely.
The Wall Street Journal reported on Saturday A deal for UBS to acquire Credit Suisse could come as early as Sunday and regulators have proposed waiving the traditional shareholder vote requirement but a key point would be ownership of Credit Suisse’s retail arm.
Credit Suisse, which has been in business for 167 years, made the announcement earlier this week Accepting a lifeline More than $50 billion from the Swiss National Bank is what the company calls a “decisive step” to boost its liquidity amid concerns about the global banking crisis and Credit Suisse’s future outlook after the collapse of Silicon Valley Bank.
“Credit Suisse is taking decisive steps to pre-emptively strengthen its liquidity by exercising its option to borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a covered loan facility and a short-term liquidity facility, fully collateralized by high-quality assets. are,” Credit Suisse said in a statement.
Credit Suisse has been sued by US shareholders for allegedly covering up financial problems
Reuters reported on Saturday that UBS is asking Swiss government About $6 billion to cover the cost if it goes ahead with the purchase.
The frenetic weekend talks come after a brutal week for banking stocks and efforts to shore up the sector in Europe and the United States that have rocked the sector. A recent explosion Silicon Valley Bank which represents the second largest bank failure in US history.
Swiss regulators are racing to present a solution for Credit Suisse before markets reopen on Monday, but the complexities of combining the two behemoths make talks likely to drag on well into Sunday, said the person, who asked to remain anonymous. status.
Credit Suisse: The risk-averse global investment bank has CCP-bound executives on its risk committee
UBS, which has assets of more than $1.1 trillion, was under pressure from Swiss authorities to acquire its local rival to help contain the crisis, two people with knowledge of the matter said. The plan could see the closure of Credit Suisse’s Swiss business.
Switzerland is preparing to use emergency measures to fast-track the deal, the Financial Times reported, citing two people familiar with the situation.
The Silicon Valley bank had no official chief risk officer before the collapse but employed a DEI executive
American officials are involved in the situation, working with their Swiss counterparts to help broker a deal, Bloomberg News also reported, citing people familiar with the matter.
Shares in Credit Suisse have lost a quarter of their value in the past week as it struggles to recover from a string of scandals that have undermined investor and customer confidence.
The company is one of the world’s largest wealth managers and is considered one of 30 global, systemically important banks whose failure would be widespread. financial system.
Credit Suisse and UBS did not immediately respond to requests for comment from Fox Business.
Reuters contributed to this report