Swiss Authorities Push for Emergency Takeover of Credit Suisse by UBS to Avoid Reputation Damage

The emergency measures would enable the acquisition of Credit Suisse by UBS to take place without needing approval from shareholders

  • Published:
  • 21/03/2023 04:11 PM

The headquarters of Swiss banks UBS and Credit Suisse are seen at Paradeplatz square in Zurich, Switzerland March 16, 2023; Image: REUTERS/Denis Balibouse

The Swiss National Bank and Switzerland's financial regulator are concerned that the reputation of Credit Suisse, an investment bank, will be damaged if something isn't done soon. They believe that the only solution is for UBS, Switzerland's biggest bank, to acquire Credit Suisse. 

To prevent a loss of confidence in Credit Suisse, Switzerland is reportedly planning to use emergency measures to speed up the takeover process and have it completed before Monday's market opening.

The emergency measures would enable the acquisition of Credit Suisse by UBS to take place without needing approval from shareholders. This would bypass the standard Swiss regulations, which usually require a six-week consultation period for shareholders to consider and vote on the acquisition.

The SNB and FINMA are collaborating to come to an agreement regarding regulations by Saturday evening. They have allegedly communicated to international counterparts that they believe the only solution to prevent a loss of confidence in Credit Suisse is to strike a deal with UBS.

UBS plans to continue with Credit Suisse's proposal to cut down the size of its investment bank. According to two sources who were briefed on the matter, the merged group will consist of no more than a third of the total combined entity. 

UBS is said to have assets worth $1.1tn, while Credit Suisse has assets worth $575bn. If the merger is successful, it will create one of the biggest systemically important financial institutions in Europe.

On March 18, BlackRock, an American investment firm, announced on Twitter that it was not interested in acquiring Credit Suisse. 

Earlier on March 15, the SNB and FINMA released a statement confirming that Credit Suisse had met the required capital and liquidity standards for systemically important banks. The statement also acknowledged that Credit Suisse had been affected by market reactions in recent days, and if necessary, the SNB would provide liquidity to the bank.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

Last Updated :

March 21, 23 04:26:05 PM IST