The Swiss federal government had consultations this evening about the situation at the Credit Suisse bank, Swiss media report. According to the Financial Times, the government in Bern is preparing measures so that the ailing company can be taken over by industry peer UBS, also from Switzerland.
Credit Suisse is in deep trouble and saw its value drop by a quarter last week. Credit Suisse received a loan of more than 50 billion euros from the Swiss central bank to stay afloat. The bank ran into problems due to the collapse of the American banks Silicon Valley Bank and Signature Bank. The collapse of those banks and the problems at Credit Suisse have led to great unrest in the financial markets.
Shares of banks, insurers and other financial institutions in particular fell sharply in value last week. Dutch companies such as Aegon, ABN Amro and ING also lost value last week.
Possibly 10,000 jobs gone
According to international news agency sources, UBS is under intense pressure from the Swiss authorities to take over Credit Suisse in order to end the crisis. The Swiss government may provide guarantees for the takeover. Reuters news agency reports that UBS is seeking around $6 billion in government guarantees for a takeover of Credit Suisse. A takeover could cost up to 10,000 jobs.
It is clear that no decisions have been made yet. The Swiss authorities want a solution for Credit Suisse before the stock markets open again on Monday, but merging the two banking giants is very complex. That is probably why there will be further discussion tomorrow.
The US authorities are also interfering with the possible takeover, reports the economic news agency Bloomberg. Both UBS and Credit Suisse are active in the US.
It is not immediately clear whether Credit Suisse should be taken over completely, or whether other companies will acquire parts of the group. Deutsche Bank is mentioned by Bloomberg as a candidate to get a share of the investment branch. Earlier today, it was rumored that the American investment giant BlackRock would like to buy the bank, but denies that fund.
Credit Suisse has been experiencing problems for some time, partly due to loss-making investments. It also emerged at the beginning of this week that there are shortcomings in the accounting. Last year, the company suffered a loss of 7.4 billion euros. UBS, where the Dutchman Ralph Hamers holds sway, just made a profit of 7 billion euros.
The problems are partly due to the collapse of the Silicon Valley Bank in the US. This has caused great unrest in Silicon Valley:
- Bank shares fall again, ‘the banking fear is not over yet’
- Billions of dollars in aid for Credit Suisse, investors are relieved
- Swiss government intervenes in Credit Suisse problems