Switzerland’s major bank UBS is poised to buy rival Credit Suisse under pressure from authorities, but the business urgently needs to avoid a wave of panic spreading in the market. At times, it’s a fraction of its worth. on monday.
Credit Suisse is one of the world’s 30 largest banks, and this week’s massive stock market crash has created tensions in the financial world.
According to the Financial Times, which first reported UBS’s potential takeover of Credit Suisse, UBS would only be willing to pay $1 billion (€930 million). End of Friday market.
The deal has been under analysis since the morning by the federal government in the Swiss capital Bern after other emergency meetings on Thursday and Saturday.
According to the Brick tabloid, the fate of Credit Suisse will be decided at an extraordinary meeting between the government and the management of the two entities in Bern.
Such mergers are complex deals that typically take months to complete, but pressure from regulators has forced UBS to close the deal within days.
pressure
According to Blick, the Swiss authorities believe they have no choice but to press UBS to overcome its reluctance under pressure from the country’s main economic and financial partners, who fear the stability of the country’s financial markets.
Swiss banking regulations stipulate that UBS must consult with its shareholders for six weeks, but the Financial Times’ Business Daily said the operation was subject to emergency measures, citing sources who wished to remain anonymous. may apply.
The Swiss market opens at 0800 GMT on Monday and Credit Suisse is perceived as a weak link in the system, so a solution is expected by then.
The bank posted a record drop on Wednesday as its stock market value plummeted to $7.58 million.
Bank customers withdrew CHF 10 billion in a single day late last week, according to the Financial Times and Brick.
These negotiations followed a dark week in the stock market, when the Swiss central bank had to intervene in Credit Suisse, lending $53.7 billion to the company to breathe fresh air and ease investor tensions. but was not successful.
public guarantee
UBS is seeking legal fees and losses that could amount to billions of Swiss francs from public bodies, according to a Bloomberg representative.
Negotiations centered around investment banking activity on Saturday, according to the financial institution, and one of the hypotheses for pulling out of the crisis is that the purchase is partial, excluding this sector.
At the end of October, Credit Suisse announced a major restructuring plan that includes cutting 9,000 jobs, or 17% of its workforce, by 2025.
With 52,000 employees at the end of October, the organization wanted to focus on more stable activities and fundamentally transform business banking.
Meanwhile, the Swiss bankers’ union on Sunday “demanded” that its representatives participate in the negotiations, given the “huge” impact the union has on the workforce.
Source: Diario.Elmundo
