According to reports, the Swiss National Bank (SNB) and Switzerland’s financial watchdog think that UBS, Switzerland’s largest bank, acquiring investment bank Credit Suisse is the “sole choice” to avert a “fall in confidence” in Credit Suisse.
Switzerland is ready to employ “emergency measures” to expedite the takeover by UBS of Credit Suisse in order to complete the transaction before “markets open on Monday,” the Financial Times said on March 18, citing three individuals familiar with the issue.
According to the newspaper, the emergency procedures would allow the transaction to move forward without a shareholder vote, dodging the standard Swiss laws that call for a “six-week” consultation process for shareholders “to consult on the purchase.”
Working to “achieve a regulatory agreement” by Saturday night, the SNB and the Swiss Financial Market Supervisory Authority (FINMA) are said to have informed their international colleagues that “they see a deal” with UBS as the “only alternative” to avoid a “fall in confidence” in Credit Suisse.
According to two of the persons who were “briefed on the situation,” the combined firm “will make up no more than a third of the merged group.” It was underlined that UBS wants to move forward with Credit Suisse’s plans to reduce the size of its investment bank.
UBS reportedly has “$1.1tn [trillion]” total assets on its balance sheet, while Credit Suisse has “$575bn [billion]” — a successful merger between the two Swiss banks would reportedly create one of “the biggest global systemically important financial institutions in Europe.”
This comes after US investment firm BlackRock declared that it “had no interest” in acquiring Credit Suisse in a tweet on March 18.
Before this, on March 15, the SNB and FINMA jointly declared that Credit Suisse had complied with the “capital and liquidity standards” for systemically significant banks.
The statement acknowledged that Credit Suisse had been “affected by market movements in recent days” and stated that, if necessary, the SNB would “provide liquidity” to Credit Suisse.