In the wake of the collapse of American banks Silicon Valley Bank and Signature Bank, global financial centers are reeling. Among the most affected is Credit Suisse, a struggling Swiss bank that has faced challenges in recent years, leading to a critical situation that demanded prompt action.
In a significant move, Credit Suisse has agreed to a complete buyout by its Swiss counterpart and key competitor, UBS, for 3 billion Swiss francs (approximately $3.25 billion USD). The Swiss National Bank views this merger as crucial for “ensuring financial stability and safeguarding the Swiss economy.”
Colm Kelleher, the chairman of UBS, emphasized the significance of the acquisition, stating, “This transaction is favorable for UBS shareholders, but it is important to underline that for Credit Suisse, this represents an urgent rescue operation.”
He added, “It is vital for Switzerland’s financial framework and the global financial landscape.”
The deal for UBS to buy rival Credit Suisse is not bailout, but the best possible solution to a difficult situation, two senior Swiss finance officials said https://t.co/YWpPuGJSwz pic.twitter.com/8ChtAts7RJ
— Reuters (@Reuters) March 20, 2023
Axel Lehmann, the chairman of Credit Suisse, acknowledged the challenge the bank has faced and the pressing need for a sustainable solution. He stated, “Amidst recent exceptional circumstances, the announced merger stands out as the most favorable outcome.”
He added, “The past period has been immensely tough for Credit Suisse, and while the team has tirelessly dealt with significant legacy issues and pursued a new strategy, we are compelled to finalize a solution today that ensures a lasting resolution.”
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