UBS Group AG is in talks to take over all or part of Credit Suisse, the Financial Times reported on Friday, after an emergency funding lifeline failed to restore investor confidence in the smaller Swiss bank.
The boards of Switzerland's two biggest lenders will meet separately over the weekend to discuss a deal, the FT said, citing several people briefed on the talks.
A source with knowledge of the matter said Swiss regulators are encouraging UBS and Credit Suisse to merge, but that both banks do not want to do so. Regulators don't have the power to force the merger, the person said.
Credit Suisse shares rose 9% in post-market trading following the FT report. Credit Suisse and UBS declined to comment on the report.
Credit Suisse, a 167-year-old bank, is the biggest name caught up in market turmoil unleashed by the collapse of U.S. lenders Silicon Valley Bank and Signature Bank over the past week, forcing it to tap $54 billion in central bank funding.
Credit Suisse executives were due to hold meetings over the weekend to chart a way forward for the ailing Swiss bank, people familiar with the matter said earlier.
In the latest sign of its growing troubles, at least four major banks, including Societe Generale SA and Deutsche Bank AG, have imposed restrictions on their operations involving the Swiss lender or its securities, according to five sources with direct knowledge of the matter.

"Credit Suisse is a very special case," said Frédérique Carrier, chief investment strategist at RBC Wealth Management. "The intervention of the Swiss central bank was a necessary step to calm the flames, but it may not be enough to restore confidence in Credit Suisse, so there is talk of more measures."
The frantic efforts to prop up Credit Suisse come as policymakers, including the European Central Bank and US President Joe Biden, have sought to reassure investors and depositors that the global banking system is safe. But fears of wider problems in the sector remain.
Already this week, big U.S. banks had to launch a $30 billion credit line for smaller lender First Republic, while U.S. banks collectively sought a record $153 billion in emergency liquidity from the Federal Reserve in recent days.
That surpassed an earlier high set during the most acute phase of the financial crisis about 15 years ago.
This reflected "funding and liquidity strains at banks, driven by weakening depositor confidence," said ratings agency Moody's, which this week downgraded its outlook on the U.S. banking system to negative.
In Washington, the focus was on increased supervision to ensure that banks, and their executives, are held accountable.
Biden, who earlier this week promised Americans that their deposits are safe, on Friday called on Congress to give regulators greater power over the banking sector, including taking advantage of higher fines, recovering funds and banning failed bank officials, a White House statement said.
A group of U.S. Democratic lawmakers also asked regulators and the Justice Department for an investigation into Goldman Sachs' role in SVB's collapse, U.S. Rep. Adam Schiff's office said Friday.


Bank stocks around the world have taken a hit since the collapse of Silicon Valley Bank, raising questions about other weaknesses in the broader financial system.
Shares of Credit Suisse, Switzerland's second-largest bank, closed down 8% on Friday, and Morningstar Direct said Credit Suisse had seen more than $450 million in net outflows from its managed funds in the U.S. and Europe from March 13-15.
Analysts, investors and bankers believe the Swiss central bank's credit line, which made it the first major global bank to take an emergency lifeline since the 2008 financial crisis, only gave it time to decide what to do next.
Shares of U.S. regional banks fell sharply on Friday and the S&P Banks index plunged 4.6%, lifting its two-week slide to 21.5%, its worst loss in two weeks since the COVID-19 pandemic rattled markets in March 2020.
First Republic Bank closed Friday down 32.8%, bringing its loss over the past 10 sessions to more than 80%.
While support from some of the biggest names in U.S. banking prevented its collapse this week, investors were surprised by First Republic's late disclosures about its cash position and how much emergency liquidity it needed.
"It seems that perhaps the damage has been done to the reputation of the First Republic brand. (It's) a shame because it was a high-quality, well-run bank," said John Petrides, portfolio manager at Tocqueville Asset Management.
Earlier on Friday, SVB Financial Group said it had filed for a court-supervised reorganization, days after U.S. regulators took over its former SVB banking unit.
Regulators have asked banks interested in buying SVB and Signature Bank to submit offers by Friday, people familiar with the matter said. U.S. regulators are willing to consider the government backing losses at SVB and Signature Bank if it helps drive a sale, the Financial Times reported on Friday, citing people briefed on the matter.
Authorities have repeatedly tried to emphasize that the current turmoil is different from the global financial crisis 15 years ago, as banks are better capitalized and funds are more readily available, but their collateral has often fallen on deaf ears.
In an unusual move, the ECB held an ad hoc meeting of the supervisory board, the second this week, to discuss tensions and volatility in the banking sector.
Supervisors were told deposits were stable across the euro zone and that exposure to Credit Suisse was irrelevant, a source familiar with the content of the meeting told Reuters.
An ECB spokesman declined to comment.

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