The Swiss authorities are considering a full or partial nationalization of Credit Suisse Group AG as the only viable option apart from an acquisition by UBS Group AG, reported Bloomberg.
The country is considering taking over the bank entirely or keeping a significant equity stake if the takeover by UBS Group AG fails due to complexities in the organization of the transaction and the short time frame involved, the people said, asking not to be identified as the matter is private.
The situation is very fluid and could still change as authorities try to finalize a solution for the bank before the opening of the Asian markets, which is in the late afternoon in Europe, the people said.
Swiss authorities are trying to broker a deal to end the demise of Credit Suisse, which shocked the global financial system last week as panicked investors dumped their stocks and bonds following the collapse of several other US lenders. little ones. Liquidity support from the Swiss central bank briefly halted declines, but the market drama carries the risk that clients or counterparties will continue to flee, with potential ramifications for the broader sector.
Under pressure from the authorities, UBS, the main Swiss bank, must finish this Sunday the purchase of his rival, Credit Suisse, to avoid a debacle and a contagious wave of panic in the stock markets on Monday but the trading is not over yet.
The UBS acquisition presents multiple complexities, including thorny issues such as government backing to cover potential legal and other losses. The biggest rival has also resisted buying Credit Suisse’s investment bank, Bloomberg reported on Saturday.
UBS is asking the government to bear certain legal costs and potential future losses on any acquisitions, the people said, with a report putting the figure at about $6 billion.
Credit Swiss It is one of the 30 largest banks in the world and its spectacular stock market crash this week generated nervousness in the financial world, sensitized after the collapse of entities in the United States.
According to the Financial Times newspaper, which was the first outlet to report a possible purchase of Credit Swiss by UBSthe latter would be willing to pay 1,000 million dollars, a fraction of the stock market valuation that the bank had at the close of the markets on Friday.
This transaction is being analyzed since morning by the federal government in the Swiss capital Bern, after other emergency meetings on Thursday and Saturday.
According to the Blick tabloid, the fate of Credit Suisse will be sealed in an extraordinary meeting between the government and the managers of the two entities in Bern.
Such a merger is a complex affair that would normally take months to complete, but under pressure from the authorities, UBS will have to close the deal within a few days.
The Swiss market opens Monday at 0800 GMT and a solution is expected to be found by then as Credit Suisse is perceived as a weak link in the system.
The bank registered a record fall on Wednesday and its stock market value plummeted to 7,000 million Swiss francs, about 7,580 million dollars, which is an almost small sum for an entity considered to be of systemic importance, so its bankruptcy must be avoided. .
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Source-www.infobae.com