The future of Credit Suisse has been decided. The badly hit bank is taken over by the larger local rival UBS. This was announced by the Swiss Federal Council and representatives of the two institutes and the supervisory authorities at a media conference on Sunday evening. The Swiss National Bank (SNB) is supporting the takeover with liquidity assistance of CHF 100 billion (around EUR 101 billion) to both banks.
A takeover of the second largest Swiss bank Credit Suisse by UBS is the most significant banking merger in Europe since the financial crisis 15 years ago. This was preceded by a marathon of negotiations that lasted the whole weekend, in which the parties involved from the two banks as well as top representatives from politics and the supervisory authorities took part.
In order to reduce any risks for UBS, the federal government is also issuing a guarantee of CHF 9 billion to cover potential losses. The measures taken will ensure that the SNB can provide Credit Suisse with extensive liquidity if necessary.
The two banks had been pushed by politicians and the supervisory authorities to merge. The Swiss Federal Council held several meetings on the situation at CS over the weekend.