Weekend of authentic heart attack in the offices of the Swiss bank. At the close of this edition, UBS and Credit Suisse are holding their respective boards of directors together to analyze the numbers of a possible merger – rather a purchase – as a tool to tackle the crisis.
Rumors of the operation have been brewing for days. But neither of the two banks had yet dared to take the first step. On the one hand, UBS needed a strong guarantee from the central bank to safely carry out the operation to take over its main competitor. On the other hand, the main shareholders of Credit Suisse would be reluctant to lose control, initially advocating going it alone, with the sale of some business units.
However, the flight of deposits and the losses suffered this week have disrupted all their plans, especially after the Swiss central bank has agreed to inject up to 50,000 million into the troubled entity. With all that money on the table, the supervisor does not want to risk that, despite the help, Credit Suisse ends up falling, so the pressure on UBS to give the final yes to the union is maximum.
Fusion is the regulator’s preferred option. But not the only one. This same Saturday, and as reported by the newspaper ‘Financial Times’, BlackRock –the largest fund manager in the world– has raised its own offer to compete with UBS.
At the moment, there is no guarantee that an agreement will be reached that, among other things, would impose certain regulatory obstacles, both in Europe and in the US. In addition, Switzerland is more convinced by the merger of its two entities. But right now all possibilities are open.
The great fear of the authorities is that Credit Suisse is considered a systemic bank. So they cannot afford their fall, which would generate heavy losses for their bondholders. A real chaos for a sector that represents 68% of the country’s GDP. The lace does not look simple. And doubts about closing an agreement have already caused other entities such as Société Générale or Deutsche Bank to limit all their operations with Credit Suisse to a minimum.
A reason for additional pressure to reach a solution throughout the weekend. The term is not something superficial. The objective is for the operation to close before the opening of the markets this Monday. And that it convinces investors to restore confidence in the country’s financial system and, above all, prevent the stock market bleeding from continuing.