Swiss National Bank has agreed to takeover its troubled rival, Credit Suisse, in a $3.2 billion emergency deal brokered by regulators in Switzerland. The file photo was taken by Michael Buholzer. Swiss National Bank has agreed to takeover its troubled rival, Credit Suisse, in a $3.2 billion emergency deal brokered by regulators in Switzerland. “UBS today announced the takeover of Credit Suisse. This takeover was made possible with the support of the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank,” the Swiss National Bank announced in a statement.
A solution has been found to secure financial stability and protect the Swiss economy in the current situation. Shareholders in Credit Suisse will receive one share in the Swiss National Bank for every 22.48 shares in Credit Suisse that they hold, CNBC reported.
As far as Credit Suisse is concerned, this is an emergency rescue. "We have structured a transaction which will preserve the value left in the business while limiting our downside exposure." Kelleher said the deal is “essential to the financial structure of Switzerland” as well as global finance.
Swiss Finance Minister Karin Keller-Sutter hailed the deal as a commercial solution and “not a bailout.”
The collapse of two U.S banks, the Silicon Valley Bank and Signature Bank, caused confidence in Credit Suisse to plummet. CNN Business reported that the Swiss bank admitted there was weakness in its books. “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome,” Credit Suisse chairman Axel Lehmann said in a statement to CNN.
While the team has worked hard to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution that provides a durable outcome. The deal was praised by the Treasury Secretary and the Chairman of the Federal Reserve. The statement said they welcomed the announcements by the Swiss authorities. “The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient. We have been in close contact with our international counterparts to support their implementation.”
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