UBS has completed its takeover and rescue of Credit Suisse with the support of the Swiss National Bank (SNB).
Furthermore, the move was backed by the Swiss federal government and regulatory body FINMA, the Swiss Financial Market Supervisory Authority.
An “exceptional situation” has led to UBS taking over Credit Suisse, securing financial stability and protecting the Swiss economy.
In addition, both banks will now have unrestricted access to the SNB’s existing facilities, through which they can obtain liquidity. Also, both Credit Suisse and UBS can obtain a liquidity assistance loan with privileged creditor status in bankruptcy for a total amount of up to CHF100bn ($108.3bn).
The provision of liquidity will ensure that both banks have access to the necessary liquidity. By providing substantial liquidity assistance, the SNB is fulfilling its mandate to contribute to the stability of the financial system, and it continues to work closely with the federal government and FINMA to this end.
As recently as two days ago, it was rumoured that the two banks were against a merger.
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The move was aimed at offering relief to the embattled Swiss bank and prevent a global banking crisis.
It coincides with the bank’s announcement to borrow up to CHF50bn ($54bn) from the SNB to raise its liquidity and investor confidence.