Credit Suisse: Last day of negotiations with UBS bank to avoid bankruptcy
The logos of Credit Suisse and UBS on the roofs of buildings in Zurich. AP - Michael Buholzer
Text by: RFI Follow
Will we witness the bankruptcy of Switzerland's second largest bank? And a potential global financial crisis? The risk is high if the Swiss banking and political authorities fail to reach an agreement to save Credit Suisse on Sunday, March 19. For several days, they have been pushing the country's largest bank, UBS, to buy its rival. The challenge: to reach a buyback before the opening of the Zurich stock exchange on Monday morning.
In the world of finance, weddings are often lifelines. In any case, for UBS, Switzerland's largest bank, it's clearly not a question of love, as the potential bride, Credit Suisse, pales in comparison.
Embroiled in financial difficulties for several years, swept away by the banking turmoil born in California, Credit Suisse – or rather "Discredit Suisse", as some Swiss now call it – is in bad shape. But this behemoth, "too big to fail" as the financiers say, must absolutely be saved to avoid a systemic shock in Europe.
The $54 billion lent this week by the Swiss Central Bank was not enough to reassure. And it is absolutely necessary to go through a buyout, according to Zurich. However, UBS, which all of Switzerland is calling for to play the role of saviour, is setting its conditions.
First, the price. According to the British daily Financial Times, UBS has offered a billion dollars, a mouthful for a bank that manages $ 1.500 trillion in assets. It then asks for a guarantee of six billion dollars to deal with probable impairments of assets. It plans to split off Credit Suisse, divest itself of its investment banking subsidiary and set aside local activities to save jobs.
► Also listen: Credit Suisse is also panicking the markets
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- Economic crisis