Former Federal Reserve Governor Robert Heller, Solus Alternative Asset Management strategist Dan Greenhaus and Zaye Capital Markets CIO Naeem Aslam discuss the Fed’s rate hike stance as Credit Suisse instability threatens global markets.
Investment banking firm UBS is reportedly close to a deal to acquire its competitor Credit Suisse in a bid to save the vulnerable financial institution from full-blown collapse.
The Wall Street Journal reported on Saturday that a deal for UBS to acquire Credit Suisse could come on Sunday or sooner and regulators have offered to waive a usual shareholder voting requirement, but one sticking point is who owns the retail banking arm of Credit Suisse will own.
Credit Suisse, which has been in business for 167 years, announced earlier this week that it is accepting a more than $50 billion lifeline from the Swiss National Bank, a move the company describes as a “crucial measure” to increase its liquidity amid a global banking crisis following the collapse of Silicon Valley Bank and concerns about the future prospects of Credit Suisse.
“Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a secured credit facility and a short-term liquidity facility fully funded by high quality assets are collateralised,” Credit Suisse said in a statement.
CREDIT SUISSE FACES LAWSUITS BY US SHAREHOLDERS ABOUT ALLEGED PREVENTION OF FINANCIAL MISSING
UBS Building in Troy, Michigan. (iStock / iStock)
Portal reported on Saturday that UBS is asking the Swiss government to absorb around $6 billion in costs if it proceeds with the purchase.
The weekend’s frenetic negotiations follow a brutal week for bank stocks and efforts in Europe and the United States to prop up the sector rocked by the recent Silicon Valley Bank implosion, which marked the second-biggest banking meltdown in US history.
Swiss regulators are scrambling to present a solution to Credit Suisse ahead of markets reopening Monday, but the complexity of the two giants’ combination raises the prospect that talks will continue well into Sunday, said the person in charge of the sensitivity asked to remain anonymous situation.
CREDIT SUISSE: VULNERABLE GLOBAL INVESTMENT BANK HAS CCP-LINKED OFFICIAL RISK COMMITTEE
The Swiss bank Credit Suisse logo can be seen at the headquarters in Zurich, Switzerland (Portal/Arnd Wiegmann/Portal photos)
UBS, which has assets of over $1.1 trillion, has been pressured by Swiss authorities to complete a takeover of its local rival in a bid to get the crisis under control, two people familiar with the matter said. The plan could see a spin-off of Credit Suisse’s Swiss business.
Switzerland is preparing for emergency measures to speed up the deal, the Financial Times reported, citing two people familiar with the situation.
BEFORE THE COLLAPSE, SILICON VALLEY BANK DID NOT HAVE AN OFFICIAL CHIEF RISK OFFICER BUT HAD AN EMPLOYEE DEI EXECUTIVE
People queue in front of Silicon Valley Bank’s headquarters to withdraw their funds on March 13, 2023 in Santa Clara, California. (Liu Guanguan/China News Service/VCG via Getty Images/Getty Images)
US authorities are implicated in the situation and are working with their Swiss counterparts to help broker a deal, Bloomberg News reported, citing people familiar with the matter.
Credit Suisse stock shed a quarter of its value over the last week as it tries to recover from a series of scandals that have eroded investor and client confidence.
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The company is one of the world’s largest wealth managers and is considered one of 30 global, systemically important banks whose failure would affect the entire financial system.
Credit Suisse and UBS did not immediately respond to a request for comment from Fox Business.
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Portal contributed to this report