Credit Suisse, UBS deal: what you need to know

UBS has agreed to buy rival Credit Suisse for three billion Swiss francs ($A4.8 billion) and assume losses of up to $5.4 billion (AU$8 billion), in a gunshot merger designed by Swiss authorities to avoid further market. Annoying disturbances in global banks.


* Asian equity and equity futures struggled to stabilize Monday, despite initial investor relief from a weekend Credit Suisse bailout deal and liquidity promises from central banks.

* Credit Suisse has told its staff that its wealth assets are operationally separate from UBS for now, but once they are combined, clients may want to consider moving some assets to another bank if concentration is a concern.

* The Association of Swiss Bankers said on Monday it was “deeply shocked” by the Credit Suisse takeover and called on UBS to keep job cuts to an “absolute minimum”.

* The deal includes CHF100 billion ($A160 billion) in liquidity assistance for UBS and Credit Suisse from the Swiss Central Bank.

* The European Central Bank said on Sunday that Switzerland’s bailout of Credit Suisse was “helpful” in restoring calm to financial markets, but it was still ready to support eurozone banks with loans if needed.

* UBS Chairman Colm Kelleher said the bank wants to keep the Swiss unit of Credit Suisse, speaking at a news conference announcing the merger of Switzerland’s two largest banks on Sunday. “It’s a good asset and we’re very determined to keep it and we hope to serve their clients and customers as efficiently as Credit Suisse did,” Kelleher said.

market reaction

* Standard Chartered and HSBC shares fell more than 6 percent in Hong Kong on Monday, to their lowest in more than two months. The MSCI index of financial stocks in Asia, excluding Japan, fell by 1.3 percent.

– The safe-haven currencies the yen and the US dollar recovered from early sharp declines, and the risk-sensitive Australian and New Zealand dollars reversed to losses.


Max Georgiou, Analyst, Third Bridge, London:

“Today is one of the most important days for European banking since 2008, with far-reaching ramifications for the industry. These events could change the course of not only European banking but the wealth management industry in general.”

Octavio Marenzi, CEO, OPIMAS, Vienna

“Switzerland’s prestige as a financial center has been shattered – the country will now be seen as a financial banana republic. The Credit Suisse debacle will have serious repercussions for other Swiss financial institutions. A country-wide reputation for prudent financial management and sound regulatory oversight has, frankly, been erased for being tough and boring.” Somewhat in terms of investments.

Related news

* The US Federal Deposit Insurance Corporation (FDIC) plans to relaunch the sale of the Silicon Valley bank after it failed to attract buyers in its latest auction, as the regulator seeks a possible cannibalization of the failed lender, according to people familiar with the matter. Subject. One option under consideration by the regulator is a sale to private bank SVB whose bidding is due on Wednesday, according to one of the sources, who asked not to be identified because those discussions are confidential.

Four prominent U.S. banking lawmakers said on Sunday they would consider whether a higher federal insurance limit on bank deposits was needed to stem a financial crisis marked by the draining of large, uninsured deposits away from smaller, regional banks. Senator Elizabeth Warren, a Democrat, said on CBS’s Face The Nation, referring to the FDIC’s current limit of $250,000 (AU$371,506) per capita: “I think raising the FDIC insurance cap (FDIC) is a good step.” depositor.

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