UBS takes over Credit Suisse in US$3.25 billion deal to calm markets
- Deal orchestrated by regulators in an effort to avoid further market-shaking turmoil in the global banking system
- Shares of Credit Suisse and other banks plunged last week after the failure of two banks in the United States
UBS will take over its troubled Swiss rival Credit Suisse for US$3.25 billion following crunch talks Sunday aimed at stopping the stricken bank from triggering a wider international banking crisis.
The deal, in which Switzerland’s biggest bank will take over the second-largest in the country, was vital to prevent irreparable economic turmoil spreading throughout the country and beyond, the Swiss government said.
The move was welcomed in Washington, Frankfurt and London as one that would support financial stability, after a week of turbulence following the collapse of two US banks.
After a dramatic day of talks at the finance ministry in Bern – and with the clock ticking towards the markets reopening on Monday – the takeover was announced at a press conference.
Swiss President Alain Berset was flanked by UBS chairman Colm Kelleher and his Credit Suisse counterpart Axel Lehmann, along with the Swiss finance minister and the heads of the Swiss National Bank (SNB) central bank and the financial regulator FINMA.
The wealthy Alpine nation is famed for its banking prominence and Berset said the takeover was the “best solution for restoring the confidence that has been lacking in the financial markets recently”.