Crunch time for Credit Suisse talks as UBS seeks Swiss assurances

By Stefania Spezzati, Oliver Hirt, and John O’Donnell

The Swiss authorities are in a race against time to rescue Credit Suisse before the reopening of the markets on Monday. Meanwhile, UBS AG is pressing for $6 billion from the Swiss government, in case it were to buy its struggling rival, informed a source familiar with the talks. The UBS demands cover the expenses of winding down segments of Credit Suisse, along with the charges of potential litigation. However, there are significant obstacles in closing the deal, and as much as 10,000 jobs might have to be terminated if the two banks join forces.

The 167-year-old Credit Suisse is going through a crisis of confidence and is the bank with the most significant global significance caught in the turmoil triggered by the fall of the US lenders Silicon Valley Bank and Signature Bank over the last week. “The last days of Credit Suisse,” proclaimed the front page of Swiss newspaper NZZ am Sonntag over an illustration of the bank’s headquarters in flames. Credit Suisse, UBS, and the Swiss government declined to comment.

The conversations come as banks globally have been hit hard, with the S&P Banks index experiencing the most significant two-week loss, a 22% decrease, since the pandemic rocked the market in March 2020. The U.S. banks have sought an unprecedented $153 billion in emergency liquidity from the Federal Reserve in recent days, and prominent banks have thrown a $30 billion lifeline to smaller lender First Republic.

Reports suggest that UBS is under pressure from the Swiss authorities to take over its local counterpart to get the crisis under control. Switzerland is preparing to use emergency measures to fast-track the deal, and the Financial Times reported that U.S. authorities are working with their Swiss counterparts to help broker the deal. Authorities are attempting to resolve the issue before the market reopens on Monday.

This week has been filled with significant headlines in the US and worldwide. One America’s Rachel Acenas delivers the top stories in our week in review.

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