According to a report by the Sky News broadcaster, the Bank of England has indicated its approval of a takeover of the ailing Swiss bank Credit Suisse by UBS.
The British central bank has signaled to its international colleagues and UBS that it will support the emergency transaction, the broadcaster further reported. According to media reports, the Swiss government met again for a crisis meeting in Bern. At first, no information about these talks leaked out.
A takeover of Credit Suisse (CS) by UBS would be the most significant banking merger in Europe since the global financial crisis some 15 years ago. For the central bank, financial regulator and government of Switzerland, it is also about preventing a major global banking crisis.
Guarantee required for protection
State guarantees should be a prerequisite for such a mega deal. According to media reports, the Swiss government should issue a guarantee to cover the risks associated with the takeover. The aim is to reach an agreement by Monday morning before the international stock exchanges open.
Credit Suisse was already battered by scandals and mismanagement when it fell into another downward spiral after the collapse of the US bank Silicon Valley Bank (SVB). Investor confidence appears to have been shaken. The share price of CS fell dramatically in the past few days.
