The Swiss National Bank (SNB) and Switzerland’s financial regulator reportedly believe the acquisition of investment bank Credit Suisse by Switzerland’s largest bank UBS is the “only option” to prevent “confidence collapsing” in Credit Suisse.
Financial TimesSwitzerland is preparing to take “emergency measures” to speed up the takeover of Credit Suisse by UBS and complete the acquisition before “markets open on Monday,” according to a March 18 report by three people with knowledge of the matter.
The report states that the contingency measures will allow the deal to proceed without a shareholder vote, bypassing the usual Swiss regulations that require a “six-week” consultation period for shareholders to “consult on the purchase”.
Switzerland prepares for UBS’ takeover of Credit Suisse
The SNB and the Swiss Financial Market Supervisory Authority (FINMA) are reportedly working until Saturday night to “reach a regulatory agreement”, telling their international counterparts that they see “agreeing” with UBS as the “only option” to avoid “confidence collapsing” in Credit Suisse. .
UBS said it intends to continue with Credit Suisse’s plans to downsize the investment bank, while two people “with knowledge of the situation” said the combined asset “will not make up more than a third of the combined group”.
UBS reportedly has total assets of “$1.1 trillion” on its balance sheet and Credit Suisse “$575 billion” – reportedly a successful merger between the two Swiss banks would create “one of the largest global systemically important financial institutions in Europe”.
This development comes after American investment firm BlackRock said in a tweet on March 18 that it was “not interested” in acquiring Credit Suisse.
BlackRock is not participating in any plans to acquire all or any part of Credit Suisse, and has no interest in doing so.
— BlackRock (@BlackRock) March 18, 2023
Earlier, SNB and FINMA issued a joint statement on March 15, stating that Credit Suisse has met “capital and liquidity requirements” imposed on systemically important banks.
In the statement, it was stated that SNB would provide “liquidity” to Credit Suisse if necessary, and it was acknowledged that Credit Suisse was “affected by the market reactions in the last days”.