British banking watchdogs have given their blessing to the takeover of Credit Suisse by Swiss counterpart UBS, as financial regulators around the world race to contain the biggest crisis in the industry since 2008.

Sky News understands that Bank of England He signaled to his international counterparts and UBS that he would support the emergency deal, which the two European banking giants want to announce later on Sunday.

Credit Suisse is on the brink of financial disaster, though $54bn (£44bn) line of credit secured From the Swiss Central Bank several days ago.

The move, intended to reassure markets and depositors, failed to stem a rush of customer withdrawals, prompting the Swiss government to request UBS to scout its historic rival late last week.

Jeremy Huntthe Chancellor of the Exchequer, and Andrew Bailey, Governor of the Bank of England, are briefed on developments regarding the most important global banking merger since the financial crash 15 years ago.

Although Credit Suisse has a market capitalization of just $8bn (£6.6bn) – down from nearly $100bn (£82bn) at its peak in 2007 – fears about its future have caused waves. From the shock in the financial markets around the world.

Its huge balance sheet for the investment bank is reported to be a stumbling block in talks with UBS, and the exact structure of the deal remained unclear Sunday morning.

UBS’s board, headed by former Morgan Stanley CEO Colm Kelleher, has reportedly been reluctant to explore a deal with the other Swiss bank, which has been forced into a series of capital-raising runs after hefty fines and restructuring fees.

Sources in the city said that the authorities in the United States pressured the Swiss government to expedite a solution to the crisis over the weekend.

Reports indicate that UBS wants the Swiss government to provide billions of dollars in support to insure it against losses arising from the takeover of its smaller rival.

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The current turmoil in the global banking sector began due to the collapse Silicon Valley Bank in the US earlier this month.

Its subsidiary was in the United Kingdom HSBC saved it for £1but a number of mid-sized US lenders were also forced to seek emergency financing.

Hopes acquisition will prevent transmission

Still, there are hopes that the Credit Suisse takeover will avoid the kind of contagion that prompts real comparisons to the 2008 crisis, when banks including Bear Stearns and Lehman Brothers collapsed.

Credit Suisse employs nearly 5,000 people in the UK, making it one of the largest investment banking employers in the city.

The Bank of England declined to comment on Sunday, while Credit Suisse and UBS have been approached for comment.

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