Following the major collapse of American banking institutions Silicon Valley Bank and Signature Bank, multiple financial centers around the world have been hit hard. One of the hardest hit is Swiss bank Credit Suisse. The bank had already been struggling in recent years, but this latest development has necessitated decisive action.
In a mutual agreement, Credit Suisse agreed to be completely bought out by another Swiss bank and one of its major financial rivals, UBS for 3 billion Swiss francs (approx. $3.25 billion USD). According to the Swiss National Bank, this merger will “secure financial stability and protect the Swiss economy.”
“This acquisition is attractive for UBS shareholders but, let us be clear, as far as Credit Suisse is concerned, this is an emergency rescue,” UBS chairman Colm Kelleher said at a press conference.
“It is absolutely essential to the financial structure of Switzerland and … to global finance,” he told reporters.
The deal for UBS to buy rival Credit Suisse is not bailout, but the best possible solution to a difficult situation, two senior Swiss finance officials said https://t.co/YWpPuGJSwz pic.twitter.com/8ChtAts7RJ
— Reuters (@Reuters) March 20, 2023
“Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome,” Credit Suisse chairman Axel Lehmann said in a statement.
“This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”