After the significant downfall of American financial institutions such as Silicon Valley Bank and Signature Bank, various financial hubs across the globe have been severely impacted. Among the hardest hit is the Swiss banking giant, Credit Suisse. The bank had been facing difficulties in recent times, and this recent development has demanded swift action.
Under a mutual understanding, Credit Suisse has agreed to a complete acquisition by another Swiss bank and one of its main financial competitors, UBS, for 3 billion Swiss francs (approximately $3.25 billion USD). According to the Swiss National Bank, this merger will “ensure financial stability and safeguard the Swiss economy.”
“This purchase is advantageous for UBS stakeholders, however, it is crucial to clarify that for Credit Suisse, this serves as an urgent rescue,” remarked UBS chairman Colm Kelleher during a press briefing.
He informed journalists, “This is absolutely vital for the financial framework of Switzerland and … for the global financial landscape.”
According to two senior Swiss finance authorities, the UBS acquisition of Credit Suisse is not a bailout but instead the most favorable solution to a challenging predicament pic.twitter.com/8ChtAts7RJ
— Reuters (@Reuters) March 20, 2023
“Given the recent exceptional and unparalleled circumstances, the announced fusion represents the optimal available resolution,” stated Credit Suisse chairman Axel Lehmann in a release.
“The period has been exceedingly demanding for Credit Suisse, and while the team has put in immense efforts to tackle numerous substantial legacy issues and implement its new strategy, we are compelled to arrive at a solution today that delivers a sustainable outcome.”
