A handshake in a rescue deal could help resolve the Credit Suisse crisis that has rattled global financial markets last week.
Citing Bloomberg, UBS Group has just made a condition to the Swiss Government to help offset future risks (pay some legal fees and potential losses) if UBS is forced to buy Credit Suisse.
Previously, UBS Group was considering acquiring all or part of Credit Suisse at the urging of Swiss authorities in the context that Credit Suisse is engulfed in a crisis of customer confidence and withdrawals are still ongoing. have not stopped.
In the negotiations, the goal of both UBS and the Swiss Government will be to come up with an agreement as early as the night of March 19, 2023. However, the situation is still uncertain and subject to change.
UBS said it will continue to implement Credit Suisse's plan to shrink the investment banking segment if the merger is successful. Accordingly, Credit Suisse will not account for more than a third of consolidated banks.
For its part, Switzerland is preparing to use emergency measures to speed up UBS's acquisition of Credit Suisse before the market opens on March 20.
Currently, the law in Switzerland stipulates that, normally, UBS must give shareholders 6 weeks to consult on the acquisition (which will merge the two largest banks in Switzerland).
Earlier, the Swiss central bank and watchdog Finma had told their international counterparts that they viewed the deal with UBS as the only way to prevent a collapse of confidence in Credit Suisse.
A handshake in the bailout could resolve the Credit Suisse crisis that rattled global financial markets last week.
While Credit Suisse is waiting for an arm to be reached, investors are still selling off the bank's stocks and bonds - especially after the collapse of two smaller banks in the US. Meanwhile, the Swiss Central Bank's money injection to help Credit Suisse is said to only stop the decline in a short time.
As noted, Credit Suisse's capitalization is currently only 7.4 billion Swiss Francs (8 billion USD) - a sharp drop from the peak of 100 billion Francs in 2007. Meanwhile, the capitalization of UBS is now 60 billion Francs.
A German bank offers to buy part of Credit Suisse's assets
Elsewhere, Deutsche Bank - Germany's largest bank is considering buying a part of Credit Suisse's assets.
Bloomberg reports, Deutsche Bank internally discussed which Credit Suisse division looks attractive and how much should be valued if it is offered for sale... And if UBS only buys a part of Credit Suisse, Deutsche Bank can may purchase some of the remaining assets.