last day for UBS to swallow Credit Suisse and avoid stock market panic Monday

A merger of the country’s two largest banks, one of which arouses growing investor mistrust and a complex affair that can normally take months. UBS has had a few days.

Press the market

But Swiss authorities have no choice but to push UBS to overcome its reluctance, because of enormous pressure from Switzerland’s main economic and financial partners who fear for their own financial centre, says Blick.

Bruno Le Maire, the French finance minister, made the message clear in Le Parisien: “We are now waiting for a final and structural solution to the problems of this bank”.

The US Treasury Department has also indicated that it is closely following the case.

The Swiss market opens at 08:00 GMT on Monday and by then a solution will have to be found for the bank, which is seen as a weak link in the industry.

10 billion Swiss francs withdrawn

After a record fall, Credit Suisse was worth barely 7 billion Swiss francs (about the same amount of euros) at the close of business on Wednesday, a misery for a bank that – like UBS – is one of 30 branches around the world that are considered too important considered to fail.

But according to the Financial Times and Blick, the bank’s customers withdrew 10 billion Swiss francs in deposits in one day late last week. A tangible sign of distrust of the establishment.

According to the Bloomberg agency, UBS requires the government to bear legal costs and potential losses, which could amount to billions of francs.

First public offering?

The discussions hit the investment bank, the financial bureau indicates, one of the scenarios examined is a takeover of only wealth and wealth management with a sale of the investment bank.

The discussions also concern the fate to be reserved for the Swiss arm of Credit Suisse, one of the profitable parts of the group that lost 7.3 billion Swiss francs last year and is still counting on “substantial” losses in 2023. brings together retail banking and lending to SMEs. One of the options being considered by analysts is that of an IPO, which would also prevent mass layoffs in Switzerland due to overlapping with UBS’s activities.

On Wednesday, mistrust from investors and partners prompted the Swiss central bank to borrow 50 billion Swiss francs to revive Credit Suisse and reassure the markets. The peace, however, was short-lived.

What about the Competition Commission?

Credit Suisse has just gone through two years marked by several scandals that, according to management, revealed “substantial weaknesses” in its “internal control”.

The federal financial market regulator (FINMA) accused him of “seriously breaching his prudential obligations” in the bankruptcy of the financial company Greensill, which marked the beginning of his setbacks.

By contrast, UBS, which spent several years recovering from the shock of the 2008 financial crisis and a massive state bailout, is beginning to reap the rewards of its efforts, and according to several media outlets, the bank was not planning to weekend to get started. on the adventure of Credit Suisse.

Depending on the configuration of the takeover, the Competition Commission could also raise its eyebrows.

Faster, stronger

At the end of October, Credit Suisse had unveiled a comprehensive restructuring plan that envisages the elimination of 9,000 jobs by 2025, or more than 17% of the workforce.

The bank, which employed 52,000 people at the end of October, plans to separate investment banking from the rest of its business to refocus on the most stable parts, including wealth management.

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