Credit Suisse has been in serious trouble in recent years. In 2022, the loss accumulated was more than 7 billion euros. The reputation has been tarnished by billions of euros in credit losses, fines and suspicions of money laundering.
Erja Tuomaala,
Petteri Lindholm
Credit Suisse bank, which has run into difficulties, is negotiating a merger with Switzerland’s largest bank UBS over the weekend. Tells about it financial newspaper Financial Times (you will switch to another service). It is feared that the bank will drift into insolvency.
The negotiations are taking place with the support of the Swiss National Bank and the market supervisor Finma.
According to information from the news agency AFP, the central bank has told the American and British central banks that the merger of Credit Suisse and UBS would be “plan A” to avoid a crisis of confidence in the banks.
According to AFP’s sources, the central bank hopes for a union possibly as early as the end of the week.
The merger would seek to calm the market
On Wednesday of this week, one of Credit Suisse’s main owners, the largest bank in Saudi Arabia, Saudi National Bank, closed the money taps.
Among other things, according to the BBC (you will switch to another service)the Saudis do not want to increase their ownership from the current ten percent. The market panicked and even raised fears of a Swiss bank collapse. As a result of the news, European bank stocks fell sharply.
The anxiety was increased by the information about the difficulties of two US banks, Silicon Valley Bank and Signature Bank.
Switzerland’s own central bank reacted quickly and tried to calm the situation by promising the bank emergency financing of around 50 billion euros. A merger could be a long-term solution.
A Swiss bank outside the Eurosystem – lower risk
Credit Suisse is among the 20 largest banks in Europe. Its position in the banking world is evidenced by its long and illustrious history. The bank was founded in 1856. It is headquartered in Zurich.
Switzerland is not part of the euro, but financial institutions are interconnected in many ways around the world, and a collapse would cause losses for numerous entities.
The ties between Credit Suisse and its European subsidiaries are not exactly clear.
The European Central Bank and the US Fed have also held discussions with the Swiss. We want to avoid a large domino effect.
After the FT news came out, the value of Credit Suisse’s shares went up. The bank has more than 50,000 employees in different parts of the world.
Sources: AFP, Reuters
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