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Credit Suisse: End Of An Era, UBS Buys Credit Suisse In A $3.23Billion Rescue Mission

Credit Suisse Office-1
Credit Suisse Office(Credit: WSJ)

It is the end of an era for one of the most globally significant banking institutions, the 167 year old Swiss bank, Credit Suisse, which was bought over on Sunday 19th March by fellow Swiss bank, UBS.

UBS is reportedly paying $3.23 billion in the deal arranged by the Swiss financial authorities to prevent a global banking crisis.

The potential bankruptcy of a major bank like Credit Suisse would have had far reaching implications for not just the Swiss economy but also globally where the bank has major footprints.

To make the merger work, the Swiss Central Bank would be giving liquidity guarantees and assistance up to $108 billion for the UBS / Credit Suisse merger.

This merger news is expected to calm global markets which had seen a lot of volatility last week, due to the issues with Credit Suisse coupled with the failures of Silicon Valley Bank (SVB) and Signature Bank in the United States. However, huge job losses are expected from the merger because both banks play in essentially the same markets, globally with exposures to investment banking, wealth management and related segments.

Credit Suisse faced a rapid decline (74%) in its listed shares and was on the verge of bankruptcy before the merger. The bank suffered a huge loss of $7.9 billion in the financial year 2022.

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