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The plan to save Credit Suisse and close its sale to UBS, its main competitor, faces critical hours. The Swiss authorities want to close the operation before the opening of the markets in Asia but the main candidate to take over the entity does not want to take a step forward without first ensuring a legal and regulatory shield that protects it in the face of future claims.

Those reluctance on the part of UBS have marked the last hours of a frantic negotiation that extends throughout the weekend with the idea of avoiding a new punishment in the stock market that continues to depreciate the value of Credit Suisse shares. According to sources consulted by the Financial Times, the Swiss authorities are preparing to use emergency measures to accelerate the acquisition in the coming hours. Under the country's current rules, UBS would have to give shareholders six weeks to consult on the acquisition, but Credit Suisse doesn't have that much time.

The entity has experienced a black week in the stock market after the loss of confidence on the part of investors and customers. Its shares have plunged 26% and the fear of the country's regulators and supervisors is that the punishment will be extended tomorrow if they do not present the market with a reliable viability plan.

UBS wants assurances that a partial or complete acquisition of its rival will not cause legal problems or losses. The information of the last hours shuffles the possibility that UBS assumes the activities of managing fortunes and assets of its rival, while selling the business bank.

The Swiss economic agency AWP has assured that both the Swiss National Bank (SNB) and the securities market regulatory commission (Finma) admit that the purchase of Credit Suisse by UBS is the only solution to avoid the collapse of the bank of the two candles.

Lack of trust

Involved in serious financial and image problems, the Credit Suisse bank suffered a 24% drop in the Zurich stock market last Wednesday, after its main shareholder since 2022, the Saudi National Bank, assured that it would not invest more in the Swiss entity to clean up its battered accounts.

To calm the market, the Swiss National Bank announced hours after that stock market crash a loan of 50,000 million francs (50,500 million euros, 54,000 dollars) to Credit Suisse, which allowed the entity to recover 19% on the Zurich Stock Exchange on Thursday, but on Friday the doubts of the shareholders returned and the shares fell again by 8%.

Before all the rumors, a former head of the Finma quoted by the Swiss television RTS, has assured in the last hours that a merger UBS-Credit Suisse is not possible according to national regulations on competition, given the dominant position of both in the Swiss banking sector.

Throughout the day yesterday also emerged rumors of purchase by the US investment fund BlackRock, which owns 4% of the shares of the Swiss bank, but the fund itself denied that possibility yesterday.

Years of crisis

Credit Suisse, founded in 1856, chains two years of millionaire losses: in 2021 they were 1,572 million Swiss francs (1,600 million euros, 1,690 million dollars), and in 2022 they almost quintupled, to 7,293 million francs (7,400 million euros, 7,800 million dollars).

Among the main factors that explain these terrible accounts and the distrust of investors is their exposure to risk firms that collapsed in previous years, such as the US hedge fund Archegos or the Anglo-Australian financial services firm Greensill.

To the financial problems are added many others around the reputation of the bank, with several resignations of its directors immersed in different scandals, which have caused a wide reshuffle of the directive in recent years.

The main strategy that Credit Suisse has launched to try to end its crisis is the ambitious restructuring plan initiated in October last year. This plan included the dismissal of 9,000 workers worldwide, a 15% cut in its expenses and a capital increase of 4,000 million francs (4,050 million euros, 4,300 million dollars) that marked the entry of the Saudi National Bank as the main shareholder.

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