The US Treasury announced the acquisition of giant UBS by its smaller competitor, Credit Suisse, in an attempt to avoid further turmoil that shook the global banking services market.;

"We welcome the Swiss authorities' announcements today to support financial stability," the ministry said in a statement.

   Edited by |Paul Mitchel 

Economic section - CJ journalist

03/20/2023 - 1:20:12 AM

   The statement added, "The capital and liquidity conditions in the US banking system are strong, and the US financial system is resilient. We have been in close contact with our international counterparts to support their implementation."

On Sunday evening, Swiss President Alain Berset announced the news of UBS' acquisition of its smaller competitor, Credit Suisse.
The Swiss president, who did not announce the value of the deal, described the agreement as "an important factor for stabilizing the international finance market. An uncontrolled collapse of Credit Suisse would lead to incalculable consequences for the country and the global financial system."
Credit Suisse is classified by the Financial Stability Board, an international body that monitors the global financial system, as one of the banks of global importance, which means that regulators believe that its uncontrolled collapse will lead to tsunamis throughout the financial system, not unlike the collapse of Lehman Brothers 15 years ago.

Details of the transaction

UBS Bank agreed to buy Credit Suisse after raising its offer to two billion Swiss francs, equivalent to two billion and 166 million dollars.
UBS will now pay more than 0.50 francs ($0.5401) per share, well below Credit Suisse's closing price of 1.86 francs on Friday.
The SNB agreed to provide a $100 billion liquidity line to the two banks as part of the deal.
The Swiss Financial Market Supervisory Authority (FINMA) confirmed that the business activities of both banks can continue without restrictions or interruptions, and will coordinate with national and international authorities.

Historic rescue

The deal came to save the bank, which was founded 167 years ago and is among the largest wealth managers in the world, after a harsh week that witnessed the second and third-largest banking collapse in US history.
As one of the 30 most important banks in the world in terms of regulation, any deal related to Credit Suisse will affect global financial markets as it opens on Monday. of a potential acquisition.
With investor and partner confidence declining, the Swiss Central Bank was forced on Wednesday to lend 50 billion Swiss francs ($54 billion) to revive the Zurich-based institution and reassure markets, but the effect of that measure is short-lived while the acquisition of this size is very complex, especially if Done in a hurry.