© Reuters.
By John O’Donnell
(Reuters) – UBS AG is weighing on Saturday a takeover of its battered Swiss competitor. Swiss credit (SIX:), sources said, a move that could allay fears that an ongoing crisis could destabilize the global banking system.
Credit Suisse, 167 years old, is the biggest name involved in the market turmoil triggered by the collapse of US banks Silicon Valley Bank and Signature Bank last week, during which the Swiss bank lost a quarter of its value. Marketplace.
To control the crisis, UBS is under pressure from Swiss authorities to carry out a takeover of its local rival, said two people with knowledge of the matter. The plan could see the Swiss government provide a guarantee against the risks involved, while Credit Suisse’s Swiss businesses could be spun off.
UBS, Credit Suisse and Switzerland’s financial regulator Finma declined to comment.
The Financial Times quoted people familiar with the matter as saying that UBS, Credit Suisse and regulators were racing to finalize a merger deal as early as Saturday night.
Credit Suisse chief financial officer Dixit Joshi and his teams met over the weekend to weigh their options for the bank, people with knowledge of the matter told Reuters, and there were several reports of interest from competitors.
US financial giant BlackRock (NYSE:) said it had no plans or interest in a rival bid for Credit Suisse, while Bloomberg reported that Deutsche Bank was looking into the possibility of buying some of the bank’s assets.
Credit Suisse’s share price fluctuated widely during the week, and the bank was forced to draw on $54 billion in central bank funding.
The mood in Switzerland, long considered an icon of banking stability, was one of melancholy as executives grappled with the future of the country’s biggest creditors.
“Banks in permanent stress” was the headline on the front page of the Neue Zuercher Zeitung newspaper on Saturday.
(Reporting by Reuters newsrooms)