Market: UBS examines a takeover of Credit Suisse with the possible guarantee of the State

by John O’Donnell

(Reuters) – UBS is considering a takeover of Credit Suisse with a possible risk guarantee from the Swiss government, two sources familiar with the matter told Reuters.

According to them, UBS was under increasing pressure from the Swiss authorities to consider such an operation.

Under the plan, Credit Suisse’s Swiss business could be spun off from the rest of the bank, the sources added.

UBS and the Swiss Federal Financial Market Supervisory Authority FINMA both declined to comment.

The Financial Times reported for its part, citing sources familiar with the matter, that UBS, Credit Suisse and the main regulators involved were rushing to finalize an agreement on the merger of the two Swiss banks, perhaps as early as Saturday evening.

The Swiss National Bank (SNB) and FINMA have told their international counterparts that a deal with UBS is in their view the only way to avoid a collapse in confidence in Credit Suisse Group, the FT added.

FINMA declined to comment on this information. No comment could be immediately obtained from UBS and Credit Suisse.

The Bloomberg agency, citing sources familiar with the matter, reported that US authorities were working with their Swiss counterparts to negotiate an agreement allowing UBS to buy all or part of Credit Suisse.

According to the agency, U.S. officials may seek to weigh in on issues that could impact the final terms of the deal between the banks.

A US Federal Reserve (Fed) official declined to comment, while the Treasury did not immediately respond to a Reuters request for comment.

Credit Suisse Group began a decisive weekend for its future on Saturday, as several competitors began to limit their transactions with the second largest Swiss bank, battered on the stock market in the wake of the market turbulence caused by the recent fall of American banks Silicon Valley Bank and Signature Bank.

(With Akanksha Khushi in Bangalore, Gilles Guillaume and Claude Chendjou for the French version)

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