UBS agrees to ’emergency rescue’ of Credit Suisse
Its Swiss rival UBS has rescued troubled bank Credit Suisse in a government-backed deal.
Sunday’s announcement came after a weekend of emergency talks in Switzerland between the two banks and the country’s financial regulators.
The Swiss National Bank said the deal was the best way to restore the confidence of financial markets and to manage risks to the economy.
Credit Suisse did not expect “any disruption to client services”.
“We are fully focused on ensuring a smooth transition and seamless experience for our valued clients and customers,” a spokesperson for the bank told the BBC.
Credit Suisse shareholders were deprived of a vote on the deal and will receive one share in UBS for every 22.48 shares they own, valuing the bank at $3.15bn (£2.6bn).
At the close of business on Friday Credit Suisse was valued at around $8bn.
But the deal has achieved what regulators set out to do – secure a result before the financial markets opened on Monday.
The merger comes amid fears over the global banking system, with Credit Suisse being the latest casualty of a crisis of confidence that has seen two mid-sized US banks fail and another propped up by emergency funding.
In a statement, Switzerland’s central bank said “a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation”.
The federal government said in order to reduce any risks for UBS it would grant a guarantee against potential losses worth $9.6bn.
The Swiss central bank has also offered liquidity assistance of up to $110bn.