The Swiss National Bank and regulator Finma have indicated their support for a merger, and the two largest banks in Switzerland, UBS and Credit Suisse, are apparently in talks for a merger deal. NewsOTG gathered that regulators think the merger is the best way to rebuild trust in Credit Suisse, which has been having problems since the failure of US lenders Silicon Valley Bank and Signature Bank.
According to reports, the banks and authorities are hurriedly working to close the deal as soon as Saturday night. The combined company would have assets worth over $2.2 trillion if the deal goes through. Yet, rumors indicate that UBS and Credit Suisse are both wary of the merger and have been looking into other strategies. The merger discussions take place after Credit Suisse requested $54 billion in assistance from the central bank to strengthen its finances. Societe Generale and Deutsche Bank, among other large banks, have restricted their trading in Credit Suisse or its securities.
The imperative to rebuild confidence in Credit Suisse also comes amid larger concerns about the banking sector. While U.S. banks as a whole recently requested a record $153 billion in emergency liquidity from the Federal Reserve, big U.S. banks were forced to give a $30 billion lifeline for smaller lender First Republic. The Swiss National Bank and financial watchdog Finma have been pressuring Credit Suisse to resolve its problems. It is unclear whether a merger with UBS will be the answer to regaining the trust of investors in the faltering bank.
