The largest Swiss banking group, UBS, bought the other largest bank in the country, swiss creditfor 3,200 million dollars.
Thus I constitute it this March 19 the President of the Swiss Confederation, Alain Bersetaffirming that it is the best way to “restore confidence” and serve “for the stability of the entire world financial system,” he said.
The purchase will be for the value of 3 billion Swiss francs (3.02 billion euros, 3.2 billion dollars) in UBS sharesthat is, at a price of just 0.76 Swiss francs per Credit Suisse share that was still worth 1.86 francs on Friday.
“The situation is known, Credit Suisse is one of the 30 systemic banks worldwide. It is one of the two main banks in the country. It is therefore not only decisive for Switzerland, for our companies, for private customers, for their own employees, but also for the stability of the entire financial system,” added Berset.
Credit Suisse, the country’s second-biggest bank after UBS, “was a cause for concern for several months,” he said, adding that the turmoil in the markets in recent days showed that “the necessary confidence” in the bank was not I could restore.
The keys to understanding the collapse of Credit Suisse and its consequences
“This turbulence destabilized the most fragile and this was the case with Credit Suisse. Despite good capitalization, Credit Suisse lost the confidence of the banks,” explained.
Consequently, “in the face of such a loss of confidence, ensuring the supply of liquidity to a bank is one of the measures to be taken as the highest priority.” For this reason, the Government succeeded on Thursday night with 50,000 million in immediate liquidity for Credit Suisse –which was already known–. Now Berset announced that the total guarantees amounted to 100 billion Swiss francs.
Already on Friday the Government came to the conclusion that “the necessary confidence could no longer be restored and that a quick solution was essential to guarantee stability”.
The newspaper financial timeswhich was the first to report Friday on the possibility of Credit Suisse being swallowed up by Switzerland’s biggest bank, said UBS had agreed to buy it for $2bn, and fellow Zurich-based lender had rejected an earlier offer from US$1 billion.
The Credit Suisse crisis is due to the collapse of the European stock markets
The FT said that shareholders would receive 0.50 Swiss francs ($0.54) per shareand that the deal would close on Sunday before markets in Asia open after the weekend break.
Swiss authorities felt they had no choice but to put pressure on UBS to overcome its reluctance, due to enormous pressure from Switzerland’s main economic and financial partners, who feared for their own financial centers, the newspaper said. Click.
A merger on this scale, involving the takeover of all or part of a bank and arousing growing concern among investors, would normally take months.
The newspaper Sonntags Zeitung he called it “the merger of the century”. “The unthinkable becomes reality: Credit Suisse is about to be taken over by UBS,” the weekly said.
“The pressure from abroad had become too great, and the fear that the tottering Credit Suisse could trigger a global financial crisis,” he added.
Shares of Credit Suisse bank plunged to the lowest level ever recorded
The Association of Swiss Bank Employees said the stakes were “high” for Credit Suisse’s 17,000 employees, “and therefore also for our economy.” besides, tens of thousands of jobs outside the banking industry were potentially at risk, it added.
Like UBS, Credit Suisse is one of 30 banks worldwide considered Global Systemically Important Banks, of such importance to the international banking system that they are considered too big to fail.
But the market move seemed to suggest that the bank was being perceived as a weak link in the chain.
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