last day of negotiations with UBS bank to avoid bankruptcy

last day of negotiations with UBS bank to avoid bankruptcy

Are we going to witness the bankruptcy of the second Swiss bank? What about a potential global financial crisis? The risk is high if the Swiss banking and political authorities fail to reach an agreement on Sunday March 19 to save Credit Suisse. For several days, they have been pushing the country’s leading bank, UBS, to buy out its rival. The challenge: to achieve a redemption before the opening of the Zurich stock exchange on Monday morning.

In the world of finance, marriages are often lifelines. In any case, for UBS, the first Swiss bank, it is clearly not a question of love, as the potential bride, Credit Suisse, pales in comparison.

Entangled in financial difficulties for several years, carried away by the banking turmoil born in California, Credit Suisse – or rather “Discredit Suisse”, as some Swiss people now call it – is in bad shape. But this juggernaut, too big to fall » as the financiers say (« too big to fail “), must absolutely be saved to avoid a systemic shock in Europe.

The 54 billion dollars lent this week by the Swiss Central Bank were not enough to reassure. And it is absolutely necessary to go through a buyout, according to Zurich. Only UBS, which all of Switzerland calls on to play the saviors, sets its conditions.

First, the price. According to the British daily FinancialTimes, UBS would have offered a billion dollars, a pittance for a bank which manages 1,500 billion dollars of assets. It then claims a guarantee of six billion dollars to deal with probable depreciation of assets. It plans to split Credit Suisse, separate from its investment banking subsidiary and set aside local activities to save jobs.

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