The Swiss government will hold a press conference later after UBS made a takeover bid for beleaguered Credit Suisse, according to local media reports.
The potential emergency bailout comes after authorities raced over the weekend to secure the future of the 167-year-old bank, which is among the world’s largest wealth managers, in a move aimed at containing the industry’s biggest crisis since 2008 and averting the global market. disturbance.
It would be the largest global banking merger since the financial crash 15 years ago.
It follows reports of Credit Suisse resisting an offer from its larger rival of up to $1 billion, believing it was too low and would hurt shareholders and employees who hold shares deferred.
As one of the 30 global banks seen as systemically important, any deal for Credit Suisse could have major repercussions.
As a last resort, the Swiss authorities were reported to have considered full or partial nationalization of the bank.
like It was revealed by Sky Newsthe Bank of England It is understood that she gave her approval for the rescue deal earlier on Sunday.
Despite this, Credit Suisse is on the brink of financial collapse $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 ask UBS to explore an acquisition.
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 investment bank balance sheets were reported to have been a stumbling block in talks with UBS.
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.
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Reports indicated that UBS wants the Swiss government to provide billions of dollars in support to insure it against losses arising from the acquisition of the smaller bank.
The current turmoil in the global banking sector began due to the collapse Silicon Valley Bank in the US earlier this month.
Hopes acquisition will prevent transmission
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.
There are hopes that the Credit Suisse takeover will avert the kind of contagion we saw during 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.