An exceptional situation calls for an exceptional measure. After a long weekend of negotiations, the bank UBS announced on Sunday evening that it was going to take over Credit Suisse, which is in free fall on the markets and could cause a banking panic.
The deal is worth 3 billion Swiss francs, or just over 3.02 billion euros, payable in UBS shares. On Friday, the second-largest bank was still worth just over 7 billion Swiss francs...
This deal was almost forced through by the Swiss authorities, who held a press conference to react. This solution "is not only decisive for Switzerland (...) but for the stability of the entire global financial system", assured the President of the Swiss Confederation, Alain Berset.
How did the situation get so out of hand so quickly?
It all started on 15 March. Credit Suisse's largest shareholder, Saudi National Bank, announced that it would not provide further support for the bank, which was suffering from investor fears after the collapse of several US banks (Silvergate, Silicon Valley Bank...).
The Saudi government has made it clear that bailing out a bank in which Riyadh already has a 10% stake is out of the question. But the situation is perilous and Credit Suisse has therefore decided to borrow money to avoid any nationalisation.
As a sign that the situation is being taken seriously, the other European banks have all plummeted on the stock market.
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