UBS Agrees to Acquire Competitor Credit Suisse to Support the Global Market

Switzerland

UBS has recently agreed to acquire its competitor, Credit Suisse, in the field of business. This move is expected to have a significant impact on the industry landscape. The acquisition is considered a strategic move that will enable UBS to expand its market reach and enhance its capabilities. The purchase will also contribute to the company's growth and profitability in the long term. This acquisition demonstrates the strength and confidence of UBS as a leading player in the business world.

The Swiss government has arranged for UBS, a major bank in Switzerland, to purchase Credit Suisse, a smaller bank.

On March 19, 2023 at 3:52 p.m. ET, the article was revised.

The Swiss government announced on Sunday that UBS will purchase Credit Suisse, its troubled competitor, in an impromptu agreement aimed at bolstering the worldwide financial industry following a tumultuous week.

The Swiss authorities stated that the agreement is the most efficient strategy to calm down the investors who were worried about the decline of Credit Suisse's stocks since the Silicon Valley Bank collapsed a few weeks ago.

The Swiss National Bank has agreed to lend a maximum of 100 billion Swiss francs, or $108.8 billion, to assist UBS. Additionally, the Swiss financial regulator, Finma, has announced that it will temporarily relax certain rules to aid UBS in assimilating its main rival.

The acquisition of Credit Suisse is the most significant result so far of the disruption caused by the collapse of Silicon Valley Bank in recent weeks. However, Credit Suisse's problems were mainly due to its own actions, connected to various scandals and financial errors that led to significant losses in trading and legal penalties amounting to billions of dollars.

Despite receiving a massive cash infusion of $54 billion from the Swiss National Bank just last week, Credit Suisse's stocks hit rock bottom as investors continued to lose faith in the company. To prevent a complete collapse, the Swiss banking authorities increased discussions between Credit Suisse and the much more stable UBS. The goal was to find a solution that would prevent a tumultuous end for Credit Suisse.

According to some sources, UBS will supposedly pay only a small amount of the approximately 8.8 billion Swiss francs, which equals roughly $9.5 billion, that Credit Suisse was worth last Friday. However, these sources warned that the details are still being discussed and that the negotiations could still collapse.

The action taken signifies the dissolution of a long-standing establishment that was established to fund Switzerland's railway system. This corporation had climbed to the highest levels of the financial industry, even rivaling noteworthy American entities such as JPMorgan Chase. However, Credit Suisse was marred with various controversies during the past several years, which includes accusations of illegal cash transactions and making incorrect trades. These incidents resulted in significant financial losses and tarnished the company's standing.

Over the past few months, the bank has been facing difficulties in its efforts to improve its performance. However, there were two incidents last week which caused Credit Suisse to decline. Firstly, on Tuesday, the bank announced that there were deficiencies in its financial reporting which were significant. Secondly, in the midst of the widespread and escalating panic about the stability of banks, Credit Suisse was also affected. As the shares of banks all over the world plummeted after the fall of Silicon Valley Bank and Signature Bank, the markets became particularly concerned about Credit Suisse's condition.

The value of Credit Suisse's stocks and bonds decreased dramatically throughout the week, and the price of protecting its debt against nonpayment also fell. Despite the Swiss regulators' attempts to reassure investors, there was a loss of market confidence. Credit Suisse announced on Thursday its intention to secure a $54 billion loan from the Swiss Central Bank in an effort to mitigate a potential financial catastrophe.

This story is still evolving. Keep an eye out for further information.

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