The two institutions have been discussing it over the weekend, with Swiss financial regulators
Troubled bank Credit Suisse has been rescued by rival UBS in a government-backed deal.
The announcement comes after a weekend of emergency talks between the two banks and Switzerland’s financial regulators.
UBS will pay ₣3 billion Swiss Francs for the 167-year-old institution, and the Swiss National Bank will also provide a liquidity assistance of up to ₣110 billion.
Switzerland’s President Alain Berset says the move was necessary.
“This is one of great breadth for the stability of international finance,” Berset said.
“An uncontrolled collapse of Credit Suisse would lead to incalculable consequences for the country and the international financial system.”
Switzerland’s Finance Minister Karin Keller-Sutter argues the nation had to take responsibility for what has happened to Credit Suisse over the past few weeks, and help steer the financial situation to steady waters.
“We regret that the bank, which was once a model institution in Switzerland and part of our strong location, was able to get into this situation at all,” Keller-Sutter asserted.
Credit Suisse suffered losses following the failure of two smaller U.S. institutions over the past fortnight.
The UBS Group Chairman says his organisation’s aim will be to stabilise proceedings, for both clients and the markets.
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” Colm Kelleher declared.
“We have structured a transaction which will preserve the value left in the business while limiting our downside exposure.
“Acquiring Credit Suisse’s capabilities in wealth, asset management and Swiss universal banking will augment UBS’s strategy of growing its capital-light businesses.
“The transaction will bring benefits to clients and create long-term sustainable value for our investors,” Kelleher said.
