credit suisse bank, First victim out United State affiliate banking crisis that broke out last week in that country, will be absorbed by its competitor oops, With the approval of the Swiss government, this was announced on Sunday, March 19th.
(See: A Turbulent Week in Markets by Credit Suisse and First Republic.)
“It is a government-backed solution that guarantees the framework conditions for its successSwiss President Alain Berset said at a news conference.
He pointed out that Credit Suisse is part of 30 considered banks.systemic riskIn the global banking system stressed that his destination He is “Decisive” Switzerland and its economy.
This decision “They were welcomed and thanked by various governments, including those of the United Kingdom and the United States, when the Swiss authorities informed them of the solution reached.Finance Minister Karen Keller-Sutter said.
(See: Another blow: Silicon Valley Bank’s parent company goes bankrupt.)
to seal the deal, Swiss Confederation offered A guarantee equivalent to more than 9,000 million euros To reduce the risk to UBS with the takeover of Credit Suisse, it was made clear.
This guarantee works “as if it were insurance” and will cover the eventual losses of a “very specific portfolio” of Credit Suisse which are seen to be problem And only if the losses involved exceed a threshold not specified by Secretary Keller-Sutter.
The official pointed this out Credit Suisse bankruptcy “It will have irreparable consequences“Not just for Switzerland, but for banks in the rest of the world and for that matter.”We have responsibilities that go beyond our borders“.
The minister emphasized that this arrangement is “not a rescue” because this figure applies just in case Banks that cannot meet their liabilities due to insolvency, Which was not the case for Credit Suisse.
(See: The US Bank That Received a $30 Billion Bailout.)
Credit Suisse bloomberg
“Here there was no problem of solvency, but there was a crisis of confidence‘, it was explained.
However, the flight of assets suffered by the bank last week and A significant drop in stock prices Within days they opened up the real possibility of bankruptcy,”Which would have had a significant impact on the guarantees, which could extend to UBS and other banksIn the world, the minister pointed out.
(See: Credit Suisse’s drop in relation to SVB’s bankruptcy.)
The authorities confirmed that a possible merger between Credit Suisse and UBS was already under discussion on the 15th, but it was decided to keep everything in the strictest confidence to avoid further injections.attractiveness in the markets.
“The solution we came up with is robust and adapted to stabilize the situation and provide security for the financial marketsPercy said.
(See: Credit Suisse to Quit Its Wealth Management Business.)
UBS President Colm Kellenher, present at the same press conference, confirmed that this process would not be subject to a shareholder vote and that Its final conclusion may take weeks or even months. Until it is fully approved by the regulatory authorities.