Credit Suisse, UBS announces the acquisition. The Swiss central bank will grant up to 100 billion francs – Corriere.it

An agreement has been reached for the acquisition of Credit Suissefrom ubs, which revised its offer upwards to more than two billion dollars. The brings it back Financial Times citing some sources, the City newspaper had already anticipated that the agreement would arrive within the day. UBS had initially offered a billion dollars, an insufficient amount for Credit Suisse which feared harming shareholders and employees. Sunday was a hectic day in which various hypotheses arose, including that of a nationalization by the Swiss Confederation, as reported by the Bloomberg agency.
With the’UBS’s acquisition of Credit Suisse — said the Swiss central bank and other authorities — a solution was found to ensure financial stability and protect the Swiss economy in this exceptional situation.

The Swiss central bank will grant UBS up to 100 billion Swiss francs in liquidity to UBS to support its acquisition of Credit Suisse. what can be read in a note from the Swiss Central Bank which confirms the rumors.
The acquisition of Credit Suisse by UBS, underlines the Authority, takes place in close coordination with the FINMA, the Confederation and the BNS. The extraordinary state support results in a full write-off of the nominal value of all Credit Suisse AT1 bonds in the amount of around CHF 16 billion and thus an increase in core capital. The bank resulting from the merger is larger in size. The current regulation provides for more stringent capital buffers in this regard. The FINMA will grant suitable transitional terms for the related constitution.

Jobs at risk

The most thorny issue is that relating to the approximately 10,000 jobs potentially at risk with the merger of the two banks. The Swiss banking union has asked for the participation of the social partners in the discussions concerning Credit Suisse. The Swiss Association of Bank Employees (Aseb) calls for the immediate establishment of a task force to address the problems of jobs at risk. No decision should be made before the social partners are involved in the discussions, argues the union. For the approximately 17,000 employees of Credit Suisse in Switzerland, the stakes are enormous, ASEI said. The union underlines the need to adopt measures to mitigate the dramatic consequences on employment.

The stew of Svb

Meanwhile, US authorities are on their way to a Silicon Valley Bank stew after failing to find a suitable buyer to take over 100% of the bankrupt bank. This was reported by the Bloomberg agency, citing some sources, according to which the Federal Deposit Insurance Corp, the federal deposit insurance agency, seems willing to separate the bank into at least two parts and proceed with their sale.

Lagarde: Quick and commanding action

I welcome the swift action and decisions taken by the Swiss authorities. They are instrumental in restoring orderly market conditions and guaranteeing financial stability, said the president of the ECB, Christine Lagarde, on the announcement of the acquisition of Credit Suisse by UBS. The euro area banking sector is resilient, with strong capital and liquidity positions nonetheless, our policy toolkit is fully equipped to provide liquidity support to the euro area financial system, if needed, and to preserve the smooth transmission of monetary policy.