Switzerland's UBS reaches deal to take over Credit Suisse | DW News

Switzerland's biggest bank UBS has reached a deal to take over its embattled rival Credit Suisse for more than two billion dollars.
The takeover comes amid fears that an ongoing banking crisis could destabilize the global financial system. Switzerland is preparing emergency measures to fast-track the takeover and UBS will receive liquidity assistance from the state. The turmoil was unleashed by the collapse of two banks in the US.

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#Switzerland #CreditSuisse #BankFailure

[gingerkilkus]

Credit Suisse, a Swiss multinational investment bank, has recently faced a series of events leading to significant losses. I am really worried about the current bank crisis.The bank had exposure to Archegos Capital Management, a family office hedge fund that collapsed in March 2021, resulting in Credit Suisse losing billions of dollars. The bank's internal investigation revealed weaknesses in its risk management systems and controls. Credit Suisse also suffered losses due to its exposure to Greensill Capital, a supply chain finance company that collapsed. The crises have led to regulatory scrutiny and changes to the bank's business operations and management team. Credit Suisse is working to raise additional capital to strengthen its balance sheet and recover from the financial losses.

[dn]

As an American, I love watching news from European countries, because reporters are so "calm" and professional.
In America, (most) reporters are so LOUD, childish, and obnoxious! 😞
Thanks for being classy, DW News!

[nedludd]

"liquidity assistance" means government subsidies. Always available to the banks, but restricted for average Joes.

[edwardblair]

To amplify what Steven Beardsly said, even if you trust that the bank itself is operating well, what you have to worry about is whether the other depositors in the bank will get scared and remove their assets from the bank. I don't know the numbers, but all it would take is 10% - 25% of the assets being removed to cause a collapse. So even if the holders of 75% of the deposits are confident, all it takes is a small number to pull their money no mater what, and another group that will keep their money in the bank for now but will quickly decide to jump when it starts to look bad to cause the collapse.
The question is "How confident are you that there are not enough crazy people in the group of depositors to cause a collapse?" Normally any sort of bet on "whether a group of people contains those with crazy ideas" will be won by the side of "there are more of them than you expexted".

[otisacre]

It’s my understanding that everything is not “fine” with the banks so long as they are engaging in fractional reserve banking which guarantees that most depositors would not get their money, even on what would be considered “a good day.”

[btan]

Seems like the big banks will get bigger as smaller banks fail. It'll probably lead to some form of industry consolidation.

[deesiInGermany]

My profit my profit... My loss our loss.
Capitalism at it's best

[aliancemd]

The more it’s reported on this, it actually makes the situation worse because more people go to get their money out.

[brennanodonnel]

Awesome, no bank is allowed to fail. Guess UBS can take on huge risk and expect to be bailed out in the future. Yes, taxpayers are paying for it.

[donaldnicol]

So the banksters get bailed out yet again by the taxpayers.

[KM-emme]

That is crazier than nutcake. On Friday its business as usual and on Monday the entire country has to throw away their CS cards and go visit their new UBS branch. Totally bonkers.

[jimbojimbo]

The reporter was amazing here, well done

[cmath]

Guess they were able to find something that really hit that "Suisse" spot. lol

[Cadmus]

This is not a psychological problem, it's an utter failure of implementing Risk Management and a failure of keeping liquidity at a reasonable level, the fact these banks have been poorly run by management is ridiculous, considering the size of these institutions. Now you have governments around the world bailing them out, just so the situation doesn't get worse.

[rkv]

In simple terms it is called bailout. What if UBS also goes down ? Who will bail them out ? Is it too big to fail ?

[RobertoAllen]

When they tell you “everything is fine” know that the exact opposite is true.

[CHMichael]

They had a big meeting behind multiple locked doors and suddenly everything is quiet again in Switzerland .

[ellensamir]

Big reorg is on the run in the future UBS, more than 10k stuff cut.

[joshuad]

Only $2 billion to buy the bank? Is that right?

[mubarakalipatel]

Good news for creating confidence all around.