Credit Suisse

Beleaguered bank Credit Suisse is bought out by Swiss rival UBS as the nation's president says an uncontrolled collapse would have had "incalculable ...

"With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation," the Swiss central bank and other authorities said. Swiss regulators were forced to step in and orchestrate a deal to prevent a crisis of confidence in Credit Suisse spilling over into the broader financial system. The deal includes 100 billion Swiss francs ($160 billion) in liquidity assistance for UBS and Credit Suisse from the Swiss central bank.

Swiss banking giant UBS agreed to buy Credit Suisse in a historic, government-brokered deal aimed at containing a crisis of confidence that threatened to ...

After emerging from a state bailout during the 2008 financial crisis, UBS built a reputation as one of the world’s largest wealth managers, catering to high- and ultra-high net worth individuals globally. It had grown into global powerhouse symbolising Switzerland’s role as a global financial centre, before struggling to adapt to a changed banking landscape after the financial crisis. A liquidity backstop by the Swiss central bank mid-week failed to end a market drama that threatened to send counterparties fleeing, with potential ramifications for the broader industry. Regulator Finma said about 16 billion francs of Credit Suisse bonds will become worthless to ensure private investors help shoulder the costs. The Swiss bank is paying 3 billion francs ($4.8 billion) for its rival in an all-share deal that includes extensive government guarantees and liquidity provisions. Authorities sought an agreement before markets opened again in Asia.

Swiss bank UBS has agreed to take over its troubled rival Credit Suisse after doubling its offer to $US2 billion ($3 billion) amid crisis talks aimed at ...

That saw the SNB step in overnight with a $54-billion lifeline. “Last autumn we had a social media storm and this had huge repercussions — more in the retail sector that in the wholesale sector. The Swiss Bank Employees Association said there was “a great deal at stake” for the 17,000 Credit Suisse staff, “and therefore also for our economy”. “We were overtaken by legacy situations by risks that materialised last year. We were effected by a market model that does no longer work in this market environment. Credit Suisse, the country’s second-biggest bank after UBS, “has been a source of worry for several months”, he said, adding that turbulence on the markets in recent days showed that “the necessary confidence” in the bank could not be restored.

Authorities have been racing to rescue the 167-year-old bank, among the world's largest wealth managers, before financial markets reopen on Monday. As one of 30 ...

The ECB vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" for restoring calm. Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen welcomed the announcement by the Swiss authorities. New Zealand dipped at the open and Australian shares were set to open down. "I know that there must be still questions that we have not been able to answer," he said. S&P 500 futures were up 0.7 per cent in early trading, adding to earlier gains, while Nasdaq futures rose 0.6 per cent. UBS will pay three billion Swiss francs ($A4.82 billion) for 167-year-old Credit Suisse and assume up to $US5.4 billion ($A8.1 billion) in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.

Australia is the first major financial centre to react to UBS's takeover of Credit Suisse, and so far the response is subdued. Follow the day's events and ...

"Why? "The capital and liquidity positions of the U.S. banking system are strong, and the U.S. dollar funding, the central banks currently offering U.S. "To improve the swap lines' effectiveness in providing U.S. dollar liquidity swap line arrangements. By Michael Janda

The rescue of Credit Suisse by UBS and moves by central banks to bolster global banking sector liquidity should calm the market.

[UBS to buy Credit Suisse for $4.5b in historic deal to end crisis](https://www.afr.com/companies/financial-services/ubs-to-buy-credit-suisse-in-historic-deal-to-end-crisis-20230320-p5cth0)The Swiss bank is paying less than half what the troubled investment bank was worth at the close of trading on Friday in a deal that was brokered by the government. [Credit Suisse’s investment bank to shrink under Swiss megadeal](https://www.afr.com/companies/financial-services/credit-suisse-s-investment-bank-to-shrink-under-swiss-megadeal-20230320-p5ctik)The Swiss bank will look to cut nearly $12b in costs, and a chunk of that could come from areas like Credit Suisse’s investment banking division. Fall of Credit Suisse shows more work is needed on bank risk](https://www.afr.com/world/europe/fall-of-credit-suisse-shows-more-work-is-needed-on-bank-risk-20230320-p5cti0)The troubled Swiss bank is not the only firm with low profitability or to have deposit outflows in the fourth quarter, but its myriad of weaknesses came at the worst possible moment. [Central banks sweep in with co-ordinated action to stem crisis](https://www.afr.com/companies/financial-services/fed-and-global-central-banks-move-to-boost-dollar-funding-20230320-p5ctiq)The US central bank has typically provided access to such arrangements at times when there’s a squeeze on the availability of dollars. In other words, UBS will pick the eyes out of the best talent and best operations inside the Credit Suisse investment bank, but Hamers emphasises he will be very selective about taking on Credit Suisse’s trading and derivatives operations. Even Credit Suisse had the sort of capital and liquidity position we could only dream about back in 2008. Those arguments are valid, of course, but the fall of Credit Suisse certainly gives off plenty of GFC-like vibes. After that first $US15 billion of losses – and that’s a lot of non-core skeletons – UBS will split losses with the government 50/50. Regulators, markets, and banks have put a lot more capital in place and are more stringent on liquidity,” he said. Connect with James on [[email protected]](mailto:[email protected]) That part of the deal will seriously matter to markets. Those are the financial safeguards.

Switzerland's biggest bank, UBS, has agreed to buy its ailing rival Credit Suisse in an emergency rescue deal aimed at stemming financial market panic ...

It had more than 50,000 employees at the end of 2022. It was worth just $8 billion at the end of last week. The global headquarters of UBS and Credit Suisse are just 300 yards apart in Zurich but the banks’ fortunes have been on very different paths recently. Shares in the 167-year-old bank fell 25% over the week, money poured from investment funds it manages and at one point account holders were withdrawing deposits of more than $10 billion per day, the Financial Times reported. “UBS today announced the takeover of Credit Suisse,” the Swiss National Bank said in a statement. In 2022, it recorded its worst loss since the global financial crisis.

The writer is managing partner and head of research at Axiom Alternative Investments. Bank investors are well aware of the risks; they know that banking ...

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So farewell to Credit Suisse. Founded in 1856, the bank has been a pillar of the Swiss financial sector ever since. Although buffeted by the financial ...

In the coming days, there will be some tough questions to answer. There will also be job losses, perhaps in the thousands. In theory, it had the capital to prevent this week's catastrophe. Founded in 1856, the bank has been a pillar of the Swiss financial sector ever since. That lack of attention is going to be very costly. After the financial crisis 15 years ago Switzerland introduced strict so-called "too big to fail" laws for its biggest banks.

The bank's agreement to be bought by rival UBS marks the end of 167 years as an independent institution.

H&R Block Coupon Code](https://www.wsj.com/coupons/hrblock) [Save up to $15 with TurboTax coupon March 2023](https://www.wsj.com/coupons/turbotax) The agreement marks the end of 167 years as an independent institution, a humbling comedown for a bank that once went toe-to-toe with U.S.

UBS will take over Credit Suisse, Swiss authorities say, in a deal to combine Switzerland's top two banks...

The ECB vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" for restoring calm. Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen welcomed the announcement by the Swiss authorities. New Zealand dipped at the open and Australian shares were set to open down. "I know that there must be still questions that we have not been able to answer," he said. S&P 500 futures were up 0.7 per cent in early trading, adding to earlier gains, while Nasdaq futures rose 0.6 per cent. UBS will pay three billion Swiss francs ($A4.82 billion) for 167-year-old Credit Suisse and assume up to $US5.4 billion ($A8.1 billion) in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.

U.S. stock futures rose in Asian trade on Monday in relief at a weekend rescue deal for Credit Suisse, though the mood was nervous and financial shares ...

"It's the irony of good news reflecting how bad things are. A top Australian central banker on Monday said stress in the global banking system was mainly confined to a small number of poorly managed banks and was just one of many considerations for domestic monetary policy. [major banks](/business/finance/two-major-banks-europe-worry-about-contagion-look-regulators-reassurance-sources-2023-03-19/) in Europe are examining scenarios of contagion in the region's banking sector and are looking to the Fed and the ECB for stronger signals of support, two senior executives close to the discussions told Reuters. Register for free to Reuters and know the full story rate expectations a bit higher ahead of a Federal Reserve meeting on Wednesday. Currency markets were broadly steady while U.S. Central banks including the Fed, the European Central Bank and Bank of Japan pledged to deepen support for liquidity, by increasing the frequency of seven-day dollar-swap operations from weekly to daily. [(FRC.N)](https://www.reuters.com/companies/FRC.N) had its credit rating pushed [deeper into junk status](/business/finance/sp-again-downgrades-first-republic-bank-ratings-2023-03-19/) by S&P Global and elsewhere efforts to raise capital are hitting [difficulties](/world/us/asset-concerns-weigh-us-regional-bank-deal-talks-2023-03-19/). [buy Credit Suisse](/business/crunch-time-credit-suisse-talks-ubs-seeks-swiss-assurances-2023-03-19/) for 3 billion francs ($3.2 billion) and assume up to $5.4 billion in losses, in a shotgun merger engineered by Swiss authorities. [(.AXJO)](https://www.reuters.com/quote/.AXJO) down 0.8% in morning trade, with the financial index [(.AXFJ)](https://www.reuters.com/quote/.AXFJ) down 1.4%. In a little over a week, the fallout from the collapse of Silicon Valley Bank - which has roiled confidence in the banking system - has brought a globally systemic lender to its knees. stock futures rose in Asian trade on Monday in relief at a weekend rescue deal for Credit Suisse, though the mood was nervous and financial shares remained under pressure from contagion fears, even with support from global central banks.

UBS has agreed to buy rival Credit Suisse, in an eleventh-hour merger engineered by Swiss authorities, as some...

The ECB vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" for restoring calm. Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen welcomed the announcement by the Swiss authorities. New Zealand dipped at the open and Australian shares were set to open down. "I know that there must be still questions that we have not been able to answer," he said. S&P 500 futures were up 0.7 per cent in early trading, adding to earlier gains, while Nasdaq futures rose 0.6 per cent. UBS will pay three billion Swiss francs ($A4.82 billion) for 167-year-old Credit Suisse and assume up to $US5.4 billion ($A8.1 billion) in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.

UBS CEO Ralph Hamers is possibly the only winner from the rapid-fire collapse of Credit Suisse. The losers include the Saudis, Ulrich Koerner, Michael Klein ...

[UBS to buy Credit Suisse for $4.5b in historic deal to end crisis](https://www.afr.com/companies/financial-services/ubs-to-buy-credit-suisse-in-historic-deal-to-end-crisis-20230320-p5cth0)The Swiss bank is paying less than half what the troubled investment bank was worth at the close of trading on Friday in a deal that was brokered by the government. Desperate Credit Suisse deal signals alarm over banks’ fragility](https://www.afr.com/companies/financial-services/desperate-credit-suisse-deal-signals-alarm-over-banks-fragility-20230319-p5ctgj)The fast fall of the once-revered Credit Suisse will rattle markets despite the rescue takeover by UBS and Swiss regulators. [Credit Suisse’s investment bank to shrink under Swiss megadeal](https://www.afr.com/companies/financial-services/credit-suisse-s-investment-bank-to-shrink-under-swiss-megadeal-20230320-p5ctik)The Swiss bank will look to cut nearly $12b in costs, and a chunk of that could come from areas like Credit Suisse’s investment banking division. Total wipeout for Credit Suisse hybrid holders rattles debt investors](https://www.afr.com/companies/financial-services/total-wipeout-for-credit-suisse-hybrid-holders-rattles-debt-investors-20230320-p5ctjp)This is the first live application of the so-called too-big-to-fail regime since the GFC, as capital providers are being forced to contribute to a recapitalisation. [impose losses on $US17 billion of AT1 bonds](https://www.afr.com/link/follow-20180101-p5ctjp) that make up part of a buffer of debt and equity intended to prevent taxpayers from having to shoulder the bill for a bank’s collapse. Echoes of GFC get louder as Credit Suisse falls](https://www.afr.com/chanticleer/echoes-of-gfc-get-louder-as-credit-suisse-falls-20230320-p5ctje)The rescue of Credit Suisse by UBS and moves by central banks to bolster global banking sector liquidity should calm the market. Fall of Credit Suisse shows more work is needed on bank risk](https://www.afr.com/world/europe/fall-of-credit-suisse-shows-more-work-is-needed-on-bank-risk-20230320-p5cti0)The troubled Swiss bank is not the only firm with low profitability or to have deposit outflows in the fourth quarter, but its myriad of weaknesses came at the worst possible moment. [Central banks sweep in with co-ordinated action to stem crisis](https://www.afr.com/companies/financial-services/fed-and-global-central-banks-move-to-boost-dollar-funding-20230320-p5ctiq)The US central bank has typically provided access to such arrangements at times when there’s a squeeze on the availability of dollars. But he will have 56 billion francs ($90 billion) of so-called bad will to help cover any write-downs, as well as 9 billion francs of guarantees from the Swiss government to take on certain losses. While UBS chairman Colm Kelleher didn’t directly address CSFB at a press conference, he did indicate the firm was happy with its own investment bank and planned to cut Credit Suisse’s substantially, as well as pare back risk. The former Citigroup investment bank head’s grand plan to revive the First Boston brand and build it into a Wall Street advisory powerhouse looks in ashes. In recent days, the pressure intensified until the Swiss government was forced to step in.

UBS Group emerged as Switzerland's one and only global bank with a state-backed rescue of its smaller peer Credit Suisse, a risky bet that makes the Swiss ...

UBS also gets to keep the jewel in Credit Suisse’s crown, the domestic bank. Credit Suisse had a market value of about $8 billion at the close on Friday. Late last year, speculation that the bank would go bust drove clients to pull tens of billions, sealing its fate. If UBS is not required to do an IPO of it, it could make sense for them to keep it, there are lots of synergies." It will change the landscape of banking in Switzerland, where branches of Credit Suisse and UBS are dotted everywhere, sometimes just metres apart. UBS is also taking out a big competitor in securities trading. UBS earned $7.6 billion in profit in 2022, while Credit Suisse lost $7.9 billion. The failure of two U.S. The two lenders have been pillars of global finance for decades. Switzerland is pledging more than 160 billion francs ($173 billion) in loans and guarantees to underpin the new group, guarding against further risks undermining the lender. Following the 2008 financial crash, politicians pledged to never bail out banks again. "Under normal circumstances, I would say it is an absolutely fantastic deal for UBS," said Johann Scholtz, equity analyst at Morningstar, covering European Banks, Amsterdam.

MAS' statement on Credit Suisse's operations in Singapore after the announced takeover by UBS Group AG.

The beleaguered Swiss bank was eventually killed by a global wave of worry about liquidity, not by bad assets that did the damage to the banking sector in ...

The faster UBS looks to sell assets out of Credit Suisse’s investment bank, the greater the losses it would have to take. Despite the risks, UBS is getting a bank that was not finally bought down by bad assets but by a wave of liquidity fears rolling around the world. A coordinated program to supply dollars to the global financial system was also announced on Sunday. Acquiring the domestic Swiss bank will significantly increase the market share of the combined group, and it could lose clients there too. However, UBS might also view a lot of the capital Credit Suisse carries for operational risks as being attached to its investment bank. UBS is protected by having wiped out most of Credit Suisse’s equity and all its junior bonds, along with the government guarantee. The combined businesses could still lose some rich clients: anyone still a client of both banks will likely want to diversify some of their assets to another institution. Based on accounts from the end of 2022, the deal increases UBS’s total assets by 52 percent to about 1.6 trillion francs ($2.6 trillion), but it increases risk-weighted assets by 78 per cent to 570 billion francs. Add this to UBS, and the combined group would have just over 30 per cent of its capital in investment banking. Even at such a price, the deal is not without risks for UBS: the cost of insuring its bonds against default jumped on news of the takeover. Credit Suisse could not afford to go into the opening of Asian markets with its own national authorities having questioned its viability. UBS didn’t want the management distraction or the risks and responsibilities that come from such a massive takeover.

Before the global financial crisis — which Credit Suisse survived without a bailout, unlike many of its peers — the Swiss lender had more than $US1 trillion in ...

Executives were already under fire for failing to protect the bank and wealthy clients from the collapse of a $US10 billion suite of funds it ran with now-disgraced financier Lex Greensill. The once-lucrative industry had imploded, and one of the most problematic deals was a $US457 million loan for the leveraged buyout of Ohio Mattress Co. Rivals were quicker to sell off Archegos’s collateral, and it took nearly two weeks for Credit Suisse to come up with an initial tally of its exposure: $US4.7 billion. In 2015, a fraud perpetrated by a private banker who had no clients and no banking experience before joining Credit Suisse was exposed. “Unfortunately, the loss of confidence from the markets and customers was no longer able to be halted.” The takeover was part of an aggressive growth strategy, including acquisitions of Swiss rivals, and the complexity kept growing. The combined assets of UBS and Credit Suisse are roughly double the size of Switzerland’s gross domestic product, and Sunday newspapers from tabloids to broadsheets were filled with stories about the looming demise of a national icon. It tended the fortunes of Arab royals and Russian oligarchs and tilted at the giants of Wall Street. “In Zurich, we’ve had a ring-side seat to this spectacular fiasco in slow-motion,” said Matthew Ruesch, founder and managing partner of Broad Creek Capital, a family office. With the country’s banking sector at risk, Swiss authorities stepped in to push UBS to become a reluctant white knight. After top shareholder Saudi National Bank told Bloomberg Television on Wednesday that it would “absolutely not” invest more in the lender, a rout was on. After tense talks over the weekend, UBS agreed to buy Credit Suisse in an all-share deal for about $US3.25 billion ($4.8 billion), less than the market value of troubled US lender First Republic Bank.

A volatile day looms in Asia, as investors' relief at a rescue deal for Credit Suisse and co-ordinated...

Stockmarkets were yet to open in Asia. "It's the irony of good news reflecting how bad things are. US 10-year Treasury bond June futures fell 19 ticks in early trade. The safe-haven yen was steady. In a little over a week, the fallout from the collapse of Silicon Valley Bank - which has roiled confidence in the banking system - has brought a globally systemic lender to its knees. S&P 500 futures rose 0.2 per cent in bumpy early trade on Monday.

Key points · UBS will acquire embattled rival Credit Suisse for approximately AU$4.8 billion · The Swiss government is backstopping the deal, expected to be ...

[emergency rescue](https://www.bloomberg.com/news/articles/2023-03-19/here-are-key-takeaways-from-ubs-s-historic-credit-suisse-deal?sref=4jN770vD),” UBS chairman Colm Kelleher said (quoted by Bloomberg). [acquire](https://www.fool.com.au/definitions/mergers-and-acquisitions/) Credit Suisse for an all-stock transaction valued at approximately CHF3 billion (AU$4.8 billion). Now, in a deal backed by the Swiss government and Swiss National Bank in an effort to contain the crisis, UBS will “This acquisition is attractive for UBS shareholders, but let us be clear, as far as Credit Suisse is concerned, this is an [NASDAQ: SIVB](https://www.fool.com.au/tickers/nasdaq-sivb/)), roiled the global banking sector. [liquidity issues](https://www.fool.com.au/2023/03/16/whats-going-on-with-credit-suisse-and-why-is-it-impacting-asx-200-shares/) last week.

UBS will take over Credit Suisse, Swiss authorities say, in a deal to combine Switzerland's top two banks...

The ECB vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" for restoring calm. Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen welcomed the announcement by the Swiss authorities. New Zealand dipped at the open and Australian shares were set to open down. "I know that there must be still questions that we have not been able to answer," he said. S&P 500 futures were up 0.7 per cent in early trading, adding to earlier gains, while Nasdaq futures rose 0.6 per cent. UBS will pay three billion Swiss francs ($A4.82 billion) for 167-year-old Credit Suisse and assume up to $US5.4 billion ($A8.1 billion) in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.

Asian financial authorities say Swiss lender's takeover not likely to affect stability of local banks.

China’s blue-chip CSI300 and Shanghai Composite Index made gains, as new monetary-easing measures by Beijing helped to offset the concerns about global banking. “The exposures of the local banking sector to Credit Suisse are insignificant,” HKMA said in a statement. “The Hong Kong banking sector is resilient with strong capital and liquidity positions.

UBS has, reluctantly and with a lot of help from the Swiss government, come to Credit Suisse's rescue.

He was most recently co-founder and associate editor of the Business Spectator website and an associate editor and senior columnist at The Australian.Connect via The risky part of the process for UBS will be how it manages down and de-risks the “tricky” businesses within Credit Suisse’s investment banking division. It will emerge with more than $2.2 trillion of assets under management and about $7.5 trillion of total assets and says it expects to generate annual run-rate cost reductions of more than $12 billion by 2027. UBS has its own investment banking operations, but indicated it will essentially shut down the Credit Suisse counterpart over time. It is remarkable that the failure of two insignificant banks in the US could topple a 167-year-old institution of globally systemic importance. UBS will now probably be the most intensely supervised bank on the planet.

Asia Pacific markets edged slightly lower on Monday morning as investors reacted to news of a Credit Suisse bailout by its bigger rival UBS.

The Dow [(INDU)](https://money.cnn.com/data/markets/dow/?source=story_quote_link) fell 1.2%, and the S&P 500 [(SPX)](https://money.cnn.com/data/markets/sandp/?source=story_quote_link) shed 1.1%. The Nasdaq Composite [(COMP)](https://money.cnn.com/data/markets/nasdaq/?source=story_quote_link) dipped 0.7%. US stock futures rose on Sunday night following the news. “Their overall exposures to the Hong Kong market are not significant.” The S&P/ASX 200 in Australia slipped 0.8%. [(N225)](https://money.cnn.com/data/world_markets/nikkei225/?source=story_quote_link) index fell 0.7%, while South Korea’s Kospi [(KOSPI)](https://money.cnn.com/data/world_markets/kospi/?source=story_quote_link) was flat in morning trade. [another day of losses](https://www.cnn.com/business/live-news/stock-market-credit-suisse-svb-banking-collapse-03-17-23/h_eee0672e6f5293070c4a5c89702e2049) on Wall Street on Friday, as investors continued to fret over the health of the global banking sector. [told a conference](https://www.rba.gov.au/speeches/2023/sp-ag-2023-03-20.html) Monday. [(UBS)](https://money.cnn.com/quote/quote.html?symb=UBS&source=story_quote_link), agreed to buy Credit Suisse [(CS)](https://money.cnn.com/quote/quote.html?symb=CS&source=story_quote_link) in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month. [(HSI)](https://money.cnn.com/data/world_markets/hang_seng/?source=story_quote_link) tumbled 1.5% at its opening. [a statement](https://www.hkma.gov.hk/eng/news-and-media/press-releases/2023/03/20230320-3/), adding that the assets of Credit Suisse’s local branch were worth approximately 100 billion Hong Kong dollars ($12.7 billion) or “less than 0.5% of the total assets of the Hong Kong banking sector.” [Credit Suisse bailout](https://www.cnn.com/2023/03/19/business/credit-suisse-ubs-rescue/index.html) by its bigger rival UBS.

Banks race to finish takeover to calm fears of new global financial crisis.

[any potential failure by Credit Suisse could prove to be a “Lehman moment”](https://www.theguardian.com/business/2023/mar/15/svb-collapse-slow-rolling-crisis-blackrock-boss-larry-fink), a reference to the collapse of Lehman Brothers in September 2008, widely seen as the proximate cause of the crash. [bank’s worst full-year loss](https://www.theguardian.com/business/2023/feb/09/credit-suisse-bonuses-loss-jobs-restructuring) since the 2008 banking crisis. [Credit Suisse](https://www.theguardian.com/business/creditsuisse) and the government said to be keen to announce a takeover as soon as Sunday afternoon, the Bank of England has reportedly signalled its blessing for such a deal. [fuelled anxiety about contagion in the international banking system](https://www.theguardian.com/business/2023/mar/18/bank-runs-bailouts-rescues-are-the-ghosts-of-2008-rising-again). [$54bn loan to Credit Suisse from the Swiss central bank](https://www.theguardian.com/business/2023/mar/16/credit-suisse-takes-50bn-loan-from-swiss-central-bank-after-share-price-plunge) failed to halt the precipitous slide in its share price. [Bank of England](https://www.theguardian.com/business/bankofenglandgovernor) will not object to UBS taking over fellow Swiss lender Credit Suisse as soon as this weekend, according to reports, amid a frantic race to stave off a crisis with echoes of the 2008 global banking crash.

The Australian dollar bounced after the rescue of Credit Suisse boosted sentiment, but systemic worries have reduced expectations of higher interest rates ...

The policy rate is expected to fall to 3.9 per cent by Christmas, more than a percentage point below the Fed’s projection issued last December. He said the banking sector is in much stronger shape globally than it was a decade ago because regulators have lifted capital and liquidity requirements. Traders assigned a 40 per cent chance to the prospect that the US central bank stands pat. Markets are pricing 0.72 percentage points of rate cuts this year with the first fully priced move arriving in July. The yield on three-year bonds, which reflect interest rate expectations, edged up to 2.9 per cent. Put simply, investors have abandoned expectations of further rate increases and are speculating on a small chance of a rate cut this year.

Asian markets trade lower as investors assess UBS' $3.2 billion purchase of Credit Suisse.

Bancorp](/quotes/USB/) lost 2%. [First Republic](/quotes/FRC/). [Bank of America](https://www.cnbc.com/quotes/BAC/), [Wells Fargo](https://www.cnbc.com/quotes/WFC/), [Citigroup](https://www.cnbc.com/quotes/C/) and [JPMorgan Chase](https://www.cnbc.com/quotes/JPM/) said Thursday they would contribute about $5 billion apiece to First Republic as part of the rescue plan. [Truist Financia](/quotes/TFC/)l and [State Street](/quotes/STT/) fell about 3% each before the bell, while [PNC](/quotes/PNC/), [Bank of New York Mellon](/quotes/BK/) and [U.S. on what happens with the state of the markets and this financial instability risk over the next few days." Friday's nosedive has brought the stock down more than 70% from where it started the week. The combined bank will have $5 trillion of invested assets, according to UBS. But market observers say the central bank's next decision on interest rates has been made less certain over the past week amid the bank crisis. Credit Suisse saw its shares tumble last week after its largest investor, the Saudi National Bank, declined to provide additional funding. Swiss regulators played a key role in facilitating the deal in an effort to quell a contagion threatening the banking sector. It said, however, Flagstar's bid did not include the roughly $4 billion in deposits related to Signature's digital banking business. dollar swap line arrangements from weekly to daily.

Following the news that the beleaguered bank would be sold to UBS for $US3.3 billion, bosses moved swiftly to try to reassure staff and contractors.

We know that many of you will have been following the intense media coverage over the past 48 hours on the future of Credit Suisse and appreciate the enormous uncertainty and stress that this has caused. [Credit Suisse’s investment bank to shrink under Swiss megadeal](https://www.afr.com/companies/financial-services/credit-suisse-s-investment-bank-to-shrink-under-swiss-megadeal-20230320-p5ctik)The Swiss bank will look to cut nearly $12b in costs, and a chunk of that could come from areas like Credit Suisse’s investment banking division. Finally, we would again like to express our gratitude to everyone at Credit Suisse for their tremendous efforts over the past few months, commitment and hard work. Should this be requested and required we will communicate at the earliest opportunity. The funds are managed independently from the company and will not be affected. As we build the plans to integrate our business, we will communicate regularly to ensure you are aware of progress and any changes that may impact you. We do not anticipate making any adjustments to UCA and deferred award programs for employees already paid and committed to employees up to the acquisition close date. We will confirm any impact on the equity component at the earliest opportunity once the transaction has closed. In the meantime, it is important that we all move forward with our daily business and operations on behalf of our clients. We are committed to treat all employees fairly, any bonus plan will be based on both business and individual performance. We work diligently and at pace throughout the coming period to identify which roles might be impacted. Today’s announcement indicates the agreement to merge Credit Suisse and UBS and is subject to necessary approvals.

Investor attention is now turning to a possible repricing of risk in bond markets and how central banks will respond.

that’s a contractionary pulse and could be the signal central banks are looking for to slow down rate rises,” Antipodes’ Mr Rodda said. AMP’s Diana Mousina notes that ruptures in the US and European banking sectors show the “risks from higher interest rates”. Central banks and regulators are aware of the consequences and what’s at stake here. “I do think systemic risks in the sector can be contained. the risk is in the less profitable banks with lower quality deposit franchises.” It’s likely that banks perceived by depositors as stronger will be net winners ...

Banking stocks tumbled on Monday as initial relief over a historic state-backed rescue of troubled lender Credit Suisse by Swiss rival UBS Group gave way to ...

"I know that there must be still questions that we have not been able to answer," he said. "I would like to make it clear that while we did not initiate discussions, we believe that this transaction is financially attractive for UBS shareholders," Kelleher said. The MSCI index for financial stocks in Asia ex-Japan Quite the contrary, it has gone global," said Mike O'Rourke, chief market strategist, Jones Trading. regional banks and moral hazard. [(FRC.N)](https://www.reuters.com/companies/FRC.N), an institution rocked by the failures of Silicon Valley and Signature Bank [(SBNY.O)](https://www.reuters.com/companies/SBNY.O). The Swiss central bank said Sunday's deal includes 100 billion Swiss francs ($108 billion) in liquidity assistance for UBS and Credit Suisse. [only global bank](/business/finance/ubs-swallows-doomed-credit-suisse-casting-shadow-over-switzerland-2023-03-20/) and the Swiss economy more dependent on a single lender. [according to a memo](/business/finance/credit-suisse-tells-staff-plans-investment-banking-be-informed-later-memo-2023-03-20/) to staff seen by Reuters. [moving some assets](/business/finance/credit-suisse-tells-staff-plans-investment-banking-be-informed-later-memo-2023-03-20/) to another bank if concentration was a concern. [(UBSG.S)](https://www.reuters.com/companies/UBSG.S) [will pay](/business/finance/how-credit-suisse-has-evolved-over-167-years-2023-03-16/) 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse Group AG [(CSGN.S)](https://www.reuters.com/companies/CSGN.S) and assume up to $5.4 billion in losses. [angering some of the holders](/business/finance/credit-suisse-writes-down-17-bln-bonds-zero-angering-holders-2023-03-19/) of the debt who thought they would be better protected than shareholders in the takeover deal announced on Sunday.

Falling prices in Asia and Europe drag down FTSE by 1.5% as UBS plunges 12%

“Focus is shifting to the implications of high-risk bond holders in banks, after holders of more risky Credit Suisse debt saw their investment wiped out. “In particular, common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier One [AT1] be required to be written down. Bank of East Asia fell 3.5%. [HSBC](https://www.theguardian.com/business/hsbcholdings) and Standard Chartered tumbled in the Asian stock market as details of UBS’s $3.2bn (£2.65bn) “emergency takeover” of Credit Suisse rattled global investors. [Banking](https://www.theguardian.com/business/banking) Authority and ECB Banking Supervision said they welcome the “comprehensive set of actions taken yesterday by the Swiss authorities”. [Credit Suisse](https://www.theguardian.com/business/creditsuisse) deal hasn’t changed their position on the hierarchy of debt when a bank fails.

Credit Suisse's largest shareholder confirmed to CNBC that it had suffered a loss of around 80% on its investment.

1.7% of SNB's investments portfolio," the Saudi National Bank said in a statement. Saudi National Bank chairman Ammar Al Khudiary on Wednesday was asked by Bloomberg if it would increase its stake in the troubled Swiss lender. The messy fallout, which spilled over across the entire banking sector, has ruptured market confidence and stoked fears of another global banking crisis. Despite the loss, Saudi National Bank says its broader strategy remains unchanged. Shares of the lender were up 0.58% on Monday at 9:30 a.m. His comments ultimately failed to stem the bank's continued rout. - Despite the loss, Saudi National Bank says its broader strategy remains unchanged. Norway's sovereign wealth fund, Norges Bank Investment Management, is also a major shareholder. Shares of the lender were up 0.58% on Monday at 9:20 a.m. QIA did not reply to a request for further details. The significant discount comes as regulators try to shore up the global banking system. Shares of UBS, Switzerland's largest bank, traded down 10.5% at 9:28 a.m.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The world's leading central banks are taking ...

“The capital and liquidity positions of the U.S. The phrase too big to fail really does spring to mind here, and this morning’s weakness in Asia markets serves to reinforce concerns about these types of writedowns and any spillover effects on the rest of the banking sector. The many scandals at Credit Suisse in recent years have tainted Switzerland’s financial sector. So we have contained the risks in the markets. Credit Suisse is a 167 year old institution that has been instrumental to the growth of the Swiss economy. Some $17bn of risky bonds issued by Credit Suisse are being wiped out as part of the deal. There is also a risk of spillover effect on global credit (although we note that senior secured bonds seem quite resilient including CS senior secured bonds which are jumping in price this morning). They pushed down US government bond prices, which was the cause of the losses at Silicon Valley Bank which failed earlier this month. These are ‘contingent convertible’ bonds that are riskier than other debt instruments and designed to get wiped out in a crisis – or converted to equity. Typically, AT1 bonds is meant to be above equity in the debt heirachy. In particular, common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier One be required to be written down. The deal hammered out yesterday sees UBS pay almost $3.25bn (£2.65bn) for Credit Suisse, or 0.76 Swiss francs per share in its own stock.

As early investor optimism about efforts to stem a banking crisis quickly evaporated, shares of Credit Suisse, UBS fell.

In a separate memo, the bank said that, as part of the takeover, if job cuts proved necessary it would be communicated to staff as per guidelines. The European Central Bank vowed to support eurozone banks with loans if needed, adding the Swiss rescue of Credit Suisse was “instrumental” in restoring calm. Credit Suisse shares slumped 62 percent in premarket trade to a new low while UBS lost 7.1 percent. “I would like to make it clear that while we did not initiate discussions, we believe that this transaction is financially attractive for UBS shareholders,” Kelleher said. “I know that there must be still questions that we have not been able to answer,” he said. The MSCI index for financial stocks in Asia ex-Japan was down 1.3 percent.

The controversial rescue deal for troubled lender Credit Suisse and the continuing fallout from the collapse of Silicon Valley Bank indicates the world is ...

While we can think a bank might be stable and solvent today, new information can emerge tomorrow to change that.” She said the decisions taken in Bern “are instrumental for restoring orderly market conditions and ensuring financial stability”. But he warned it may put further valuation pressure on the already shaky US regional banks. Will they get the same treatment that SVB or Signature Bank just got?” Mr Lankford asked. Mr Lankford replied, “That is happening, right now … The study published on the Social Science Research Network identified 186 banks that could fail if half their depositors withdraw their funds quickly. “A full banking crisis has suddenly rushed across the horizon toward us. Associate Professor Mark Humphery-Jenner from the School of Banking and Finance at UNSW Business School said he agreed with the RBA that Australian banks “are fundamentally stronger than Credit Suisse or the US regional banks”. Fractional banking issues have always been there, but they have now entered the mainstream conversation front and centre. “A bank only gets that treatment if a [supermajority] of the FDIC board, a supermajority of the Fed board, and I in consultation with the President determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences,” Ms Yellen replied. The previous leveraged upside is now turning into leveraged downside risk. The wealthy European nation is famed for its banking prominence and Mr Berset said the takeover was the “best solution for restoring the confidence that has been lacking in the financial markets recently”.

Australian markets have plunged again as the bailout of European banking giant Credit Suisse rattles confidence in the global bank system.

She said the rapid acquisition of Credit Suisse brokered by the Swiss government was evidence that authorities fear a “significant loss of confidence” in the system that could spark a new crisis. Dr Humphery-Jenner said the biggest risk facing Australian banks is getting caught up in a loss of confidence globally as regional US banks come under the pump. However, Dr Zhong said mounting financial pressure on regional banks in the US is concerning, because a looming credit crunch in the world’s largest financial market could hurt Australians. University of New South Wales associate professor Mark Humphery-Jenner said the string of bank collapses is a “slow-moving train crash” eroding confidence in the global financial system. [sparked speculation about a looming financial crisis in the US.](https://thenewdaily.com.au/finance/finance-news/2023/03/13/silicon-valley-bank-signature/) Swiss authorities brokered the ₣3 billion ($4.8 billion) deal over the weekend in a bid to prevent the financial situation at the bank to worsen, and create more financial turmoil across Europe.

Despite bold proclamations from Swiss authorities and central banks about a return to stability, the deal does not appear to have laid to rest concerns ...

"But in our view, it has become harder to assess the attractiveness of the current historically large spread pick-up provided by AT1 bonds vs. This could set in train renewed jitters about the health of banks." "This solves what I think is probably an idiosyncratic problem at Credit Suisse, but I'm not sure it's a firebreak big enough to stop the rot for the market," he said Monday. James Sym, head of equities at London-based investment manager River and Mercantile, told CNBC that the market was in "seek and destroy mode." "They are designed to impose permanent losses on bondholders or be converted into equity if a bank's capital ratios fall below a predetermined level, effectively propping up its balance sheet and allowing it to stay in business. The deal also includes support from the Swiss government, financial regulator FINMA, and the Swiss National Bank (SNB), which will offer a liquidity line of up to 100 billion Swiss francs, backed by a federal default guarantee. But as we discussed on Friday, we take comfort from the limited contagion from U.S. "Of course, we are mindful that the situation among U.S. The government will offer a loss guarantee of up to 9 billion Swiss francs, with UBS assuming the first 5 billion of potential losses. The U.S. hit us at the most unfavorable moment." bank has shifted back to an overweight allocation on European banks as a result.

UBS Chairman Colm Kelleher said the acquisition was “attractive” for UBS shareholders, but clarified that, “as far as Credit Suisse is concerned, this is an emergency rescue.”.

The size of Credit Suisse was a concern for the banking system, as was its global footprint given its multiple international subsidiaries. This could set in train renewed jitters about the health of banks." "Acquiring Credit Suisse's capabilities in wealth, asset management and Swiss universal banking will augment UBS's strategy of growing its capital-light businesses." The bank's Chairman Colm Kelleher said the acquisition was "attractive" for UBS shareholders but clarified that "as far as Credit Suisse is concerned, this is an emergency rescue." Credit Suisse shares collapsed by 60% at around 9:05 a.m. London time (5:05 a.m.

Some Australian staff believe that former CEO Tidjane Thiam's decision to sideline his investment bank was responsible for the company's failure.

UBS, another Swiss bank with large Australian operations, agreed to buy Credit Suisse for three billion Swiss francs, less than half what it was worth at the close of trading on Friday. Some of them will be out on the street through no fault of their own.” “It was a business that did some amazing things in the 1990s and 2000s,” says Wylie, who ran, or co-ran, the investment bank from 1994 to 2000. He figured, if investors trusted Credit Suisse to be a reliable profit generator, the share price would go up. An internal investigation cleared Thiam, but the story created such ill will at the bank that his resignation was unanimously accepted by its board. As their targets shrank to domestically driven clients, the business entered a downward spiral that was almost impossible to reverse. Credit Suisse didn’t make the top 10. He was also responsible, many believe, for setting Credit Suisse on the road to its destruction. Australia, part of Asia, was, in effect, cut off from the US and Europe, where separate balance sheets gave them little incentive to cooperate with the Sydney and Melbourne offices. The Australian bankers considered themselves the equals of their counterparts at UBS, Macquarie and Merrill Lynch. As divisions tried to meet their quarterly profit forecasts, they signed up clients, He cut back on poaching expensive bankers.

“In my eyes, this is against the law,” said Patrik Kauffman, a fund manager at Aquila Asset Management, who invests in additional tier 1 (AT1) bank debt.

For cost savings, you can change your plan at any time online in the “Settings & Account” section. Compare Standard and Premium Digital For a full comparison of Standard and Premium Digital,

Decision over bonds rips up convention and could undermine confidence in banking system.

Since there are reckoned to be $275bn (£224bn) of these instruments in issue around the world, it is not a small market to mess with – thus other regulators’ scramble to say nothing has changed in their back yards. But the long-term impact of the ATI affair is the big unknown. The problem is solely the ripping-up of the hierarchy of financial pain. One could take the view that shareholders are getting only a tiny sum of less than a franc a share but, by rights, the figure ought to be zero. And the terms, at face value, look generous to UBS, so the risk of creating a bigger banking whirlpool is lessened. [do the deal over a weekend](https://www.theguardian.com/business/2023/mar/19/credit-suisse-bank-of-england-wont-object-to-takeover-as-ubs-considers-1bn-bid).

Markets were mixed after the rescue of Credit Suisse, leaving the Fed stuck between a rock and hard place as it contemplates a rates decision on Wednesday ...

The losers include the Saudis, Ulrich Koerner, Michael Klein and even Swiss regulators [UBS to buy Credit Suisse for $4.5b in historic deal to end crisis](https://www.afr.com/companies/financial-services/ubs-to-buy-credit-suisse-in-historic-deal-to-end-crisis-20230320-p5cth0)The Swiss bank is paying less than half what the troubled investment bank was worth at the close of trading on Friday in a deal that was brokered by the government. [One big winner and (many) losers from Credit Suisse collapse](https://www.afr.com/companies/financial-services/one-big-winner-and-many-losers-from-credit-suisse-collapse-20230320-p5ctlq)UBS CEO Ralph Hamers is possibly the only winner from the rapid-fire collapse of Credit Suisse. [Credit Suisse’s investment bank to shrink under Swiss megadeal](https://www.afr.com/companies/financial-services/credit-suisse-s-investment-bank-to-shrink-under-swiss-megadeal-20230320-p5ctik)The Swiss bank will look to cut nearly $12b in costs, and a chunk of that could come from areas like Credit Suisse’s investment banking division. Echoes of GFC get louder as Credit Suisse falls](https://www.afr.com/chanticleer/echoes-of-gfc-get-louder-as-credit-suisse-falls-20230320-p5ctje)The rescue of Credit Suisse by UBS and moves by central banks to bolster global banking sector liquidity should calm the market. Fall of Credit Suisse shows more work is needed on bank risk](https://www.afr.com/world/europe/fall-of-credit-suisse-shows-more-work-is-needed-on-bank-risk-20230320-p5cti0)The troubled Swiss bank is not the only firm with low profitability or to have deposit outflows in the fourth quarter, but its myriad of weaknesses came at the worst possible moment. [Central banks sweep in with co-ordinated action to stem crisis](https://www.afr.com/companies/financial-services/fed-and-global-central-banks-move-to-boost-dollar-funding-20230320-p5ctiq)The US central bank has typically provided access to such arrangements at times when there’s a squeeze on the availability of dollars. Total wipeout for Credit Suisse hybrid holders rattles debt investors](https://www.afr.com/companies/financial-services/total-wipeout-for-credit-suisse-hybrid-holders-rattles-debt-investors-20230320-p5ctjp)This is the first live application of the so-called too big to fail regime since the global financial crisis, as capital providers are being forced to contribute to a recapitalisation. Does he pause rates now and give banks and markets a bit of room to digest a tumultuous few weeks? In a world this rife with fragilities, it seems a pause would be the sensible thing to do. Still, the Australian businesses of UBS and Credit Suisse don’t look like the most comfortable fit. But the idea that central banks are now apparently worried that banking woes could hit Main Street and choke off credit supply will have come as a surprise to many – it certainly shocked this columnist. The trading and derivatives business, for example, will be de-risked and wound down in short order.

What has happened? The latest fears centre on a type of bank debt introduced after the 2008 financial crisis, which had been designed to increase banks' safety ...

“This approach has been consistently applied in past cases and will continue to guide the actions of the SRB and ECB banking supervision in crisis interventions.” However, investors still fear that a precedent could be set, which would push up the cost of AT1 debt in future. Because of this, the bonds are riskier to hold, and investors are offered a higher return to own them. Typically when a company goes bust, bondholders rank before shareholders in the creditor pecking order for any recoveries that can be paid. This helps to reduce debts, while handing the bank a capitalisation boost. The next layer down is AT1 capital, which typically consists of hybrid bonds.

Employees said this wasn't “a Lehman Brothers moment” when news broke on Monday morning that rival UBS was to buy the embattled bank.

“That’s been the busiest part, to be honest.” “I’ve been bored for the past few months. Connect with Joanne on [[email protected]](mailto:[email protected]) There’s just been such little activity,” they said. Another also mentioned the low levels of activity they had witnessed. I mean, this isn’t exactly a Lehman Brothers moment.”

For decades, Switzerland has sold itself as a haven of legal certainty for bond and equity investors. The collapse of Credit Suisse has raised some hairy ...

They are meant to act as a capital buffer in times of stress. Kunz, a professor specialised in economic law at the University of Bern. AT1 bonds were introduced after the global financial crisis to ensure losses would be borne by investors not taxpayers. The country “is not endangered, but there might be the risk of lawsuits” because authorities “intervened here on very thin ice.” The collapse of Credit Suisse revealed some unpleasant home truths. Then bondholders discovered that $US17 billion ($25 billion) worth of so-called Additional Tier 1 debt was worthless.

There'll be fewer investment banker pitchbooks flying around the market once Credit Suisse shuts shop, but the most noticeable difference in Australia will ...

[Sign up to the Street Talk First Look newsletter.](https://login.myfairfax.com.au/beta/members/my_account/newsletters?callback_uri=https://www.afr.com&channel_key=9ME3ACTT4ZYY1fEMfvR2EA) [Anthony Macdonald](/by/anthony-macdonald-j7gcx)co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. Connect with Anthony on [[email protected]](mailto:[email protected]) [Sarah Thompson](/by/sarah-thompson-j7ger)has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Credit Suisse’s decline is likely to take a different route. And once you start losing share, it’s hard to stop the outflows. Email Sarah at [[email protected]](mailto:[email protected]) [Kanika Sood](/by/kanika-sood-p535tz)is a journalist based in Sydney who writes for the Street Talk column. And equities is a scale game. [The content piece came via its analysts, including a handful of Peter Lee award winners, and traders, who would lob ideas to fund managers each morning.] There’s no off switch, or finishing date. Credit Suisse’s Australian desk still finished with 10.3 per cent of the Australian equities market in 2022, according to Iress numbers obtained by Street Talk, but has dropped back to 7.1 per cent this year. It had 185 stocks under coverage at one point. The strategy - and the market share - was put under pressure last year, when Credit Suisse wound back prime broking (lending to hedge funds) and later cut back its swaps business globally, as part of a re-aligning of its risk appetite. Credit Suisse had become a big player in Australia’s cash equities market, running the second-biggest business by market share in 2020, 2021 and 2022 and handling about one-tenth of all trades involving an ASX-listed company.

Credit Suisse's shock takeover may be due to recent events but the root cause of its woes goes back three decades – to a Sealy mattress.

In February 2002, it was alleged Credit Suisse had been looking after the assets of criminals and dictators for decades. So infamous was the transaction in 1990, it became known as the “burning bed” deal. The rot at Credit Suisse is not new. But it also led to scandal after scandal. The First Boston name was to be resurrected and the firm sold off while Credit Suisse would return to its roots as a bank focused on Switzerland. Sensing an opportunity, Credit Suisse swooped in and eventually bailed out First Boston in 1990 for a mere $1bn, taking control of the bank in the process. Meanwhile, UBS’ fourth quarter saw it profit by more than $2.5 billion. At the time, Credit Suisse had a long relationship and joint venture with the First Boston investment bank in the US. Then, emboldened, it kept on taking risks. The $5 billion deal that will see Credit Suisse fall into the arms of arch rival UBS was a reaction to the ripples from the failure of two smaller banks in the US and jitters in the financial markets. At the heart of a $1 billion deal, that catapulted Credit Suisse into a global powerhouse, was a mattress – or rather lots of mattresses. The ‘burning bed’ was the first of many scandals for embattled bank Credit Suisse

The Swiss banking giant is set to absorb its troubled competitor after launching a $5 billion deal pre-approved by regulators. The Swiss Federal Department ...

Acquiring Credit Suisse’s capabilities in wealth, asset management, and Swiss universal banking will augment UBS’ strategy of growing its capital-light businesses. The review found that as at 31 December 2022, the bank’s internal processes were “not effective”, given it did not “design and maintain an effective risk assessment process” used to identify and analyse the risk of” material misstatements”. As at 31 December 2023, Credit Suisse had a Common Equity Tier 1 (CET1) ratio of 14.1 per cent and an average liquidity coverage ratio (LCR) of 144 per cent (since rising to 150 per cent as at 14 March). The measures aimed to address ongoing concerns over the strength of the bank’s balance sheet, which was undermined by “significantly higher withdrawals” of cash deposits and non-renewal of maturing time deposits over the fourth quarter of 2022. Both offers, which expire on Wednesday, 22 March 2023, would help manage Credit Suisse’s “overall liability composition”, while also “optimising interest expense” and allowing the bank to “take advantage of current trading levels to repurchase debt at attractive prices”. Separately, Credit Suisse offered to repurchase US$10 denominated senior debt securities via a tender offer, valued at up to US$2.5 billion (AU$3.7 billion), while also launching a cash tender offer for four Euro denominated senior debt securities at an aggregate consideration of up to €500 million (AU$798 million). [“pre-emptively” strengthen its liquidity](https://www.investordaily.com.au/markets/53042-credit-suisse-pre-emptively-accepts-liquidity-safeguard) by exercising an option to leverage a Covered Loan Facility and a short-term liquidity facility offered by the SNB. As part of the “all-share” transaction, Credit Suisse shareholders have been offered one UBS share for every 22.48 Credit Suisse shares, representing approximately CHF 0.76 (AU$1.22) per share for a total consideration of CHF 3 billion (AU$4.8 billion). “The combination supports our growth ambitions in the Americas and Asia while adding scale to our business in Europe, and we look forward to welcoming our new clients and colleagues across the world in the coming weeks.” “Bringing UBS and Credit Suisse together will build on UBS’ strengths and further enhance our ability to serve our clients globally and deepen our best-in-class capabilities,” UBS chief executive officer and the prospective group CEO of the merged institution, Ralph Hamers, said. Once finalised, the acquisition would involve “managing down” Credit Suisse’s investment bank while reinforcing UBS’ global investment strategy, with the combined investment business to account for approximately 25 per cent of group risk weighted assets. The Swiss Federal Department of Finance (FDF), the Swiss Financial Market Supervisory Authority (FINMA), and the Swiss National Bank (SNB) have offered their full support for the proposed acquisition of Credit Suisse by global investment banking peer UBS.

As the Credit Suisse fallout continues, attention is now turning to the bank's surprising link with an Australian billionaire.

Lescaudron committed suicide in 2020. The court found that the Credit Suisse affiliate “was prioritising the revenues Mr Lescaudron generated for Credit Suisse over the interests of its clients”. The case stemmed from the actions of Patrice Lescaudron, a former star banker at Credit Suisse sentenced by Swiss authorities to five years in prison in 2018 on charges of fraud and forgery. It found Credit Suisse had failed in its duty to “adequately identify, limit and monitor risks in the context of the business relationship with Lex Greensill over a number of years”. The deal – which was described by Switzerland’s SonntagsZeitung newspaper as “the merger of the century” – was inked after the 166-year-old institution found itself teetering on the brink of collapse following a share price bloodbath which was triggered by several reasons, including the discovery of “material weakness” in the institution’s financial reporting and the refusal of its biggest shareholder to support it by buying even more shares. [Swiss Financial Market Supervisory Authority FINMA](https://www.finma.ch/en/news/2023/02/20230228-mm-greensill/) released in February discovered that Credit Suisse had “little knowledge and control” over some of its dealings with Greensill Capital, and some experts are convinced Credit Suisse’s troubles began with its exposure to the firm.

A key element of Credit Suisse's “rescue” was a Swiss regulator's decision to declare $26 billion of the bank's bonds worthless.

He was most recently co-founder and associate editor of the Business Spectator website and an associate editor and senior columnist at The Australian.Connect via Saudi National has lost the best part of $US1 billion of the equity investment it made only last November as part of a capital raising designed to shore up Credit Suisse’s balance sheet. They, and the hedge funds actively trading Credit Suisse’s debt last week with a conviction it had the capital to survive, have deep pockets to fund any litigation challenging Finma’s actions. And those fewer buyers will dump their exposures at the first inkling of bank distress. It is arguable that the Swiss have paid UBS handsomely to take Credit Suisse off their hands. [ Sign up to get it every weekday morning](https://www.smh.com.au/newsletter-signup?newsletter=business-briefing). That upends the usual order of credit rankings, where bondholders rank ahead of shareholders. Cheaper than equity and only redeemable at the issuer’s option, they have become a key element of banks’ total loss-absorbing capital, particularly in Europe. Its annual report, also issued last week, showed that at December 31 it had shareholder funds of almost $US50 billion and net tangible assets of about $US45 billion. The way the “rescue” of Credit Suisse was structured has deliberately blown up a lot of value, which is great for UBS and its shareholders, but an awful outcome for Credit Suisse’s investors. Even a “bail-in,” or the forced conversion of their bonds to equity, would have offered a better outcome, and by switching $US17.3 billion of debt into $US17.2 billion of new equity would have been more in keeping with the role CoCos were intended to play in a crisis. The way the ‘rescue’ of Credit Suisse was structured has deliberately blown up a lot of value, which is great for UBS and its shareholders, but an awful outcome for Credit Suisse’s investors.

Investors responded in kind. In Europe, UBS shares rose 1.02% (though Credit Suisse tanked 55.74%, making each share worth less than $1). Banking stocks in the ...

[managed to rebound](https://www.cnbc.com/2023/03/20/first-republic-falls-sp-credit-rating-downgrade.html). [First Republic Bank continued sinking](https://www.cnbc.com/2023/03/20/first-republic-falls-sp-credit-rating-downgrade.html). All [major indexes made minor gains](https://www.cnbc.com/2023/03/19/stock-market-today-live-updates.html). Bondholders, unsurprisingly, [aren't happy about it](https://www.cnbc.com/2023/03/20/17-billion-of-credit-suisse-bonds-worthless-following-ubs-takeover.html). [UBS to buy Credit Suisse](https://www.cnbc.com/2023/03/19/ubs-agrees-to-buy-credit-suisse-as-regulators-look-to-shore-up-global-banking-system.html), with an aim [to increase confidence in the banking sector](https://www.cnbc.com/2023/03/20/what-ubs-rescue-of-credit-suisse-cs-means-for-markets-and-banks.html). The banking crisis is causing regional banks — which account for around a third of all lending in the United States — to reduce their loans, said Eric Diton, president and managing director of The Wealth Alliance. This suggests markets are already so jittery that whatever the Fed does — even if it's nothing — it might cause instability to spread. New York Community Bancorp (which [agreed to buy Signature Bank](https://www.cnbc.com/2023/03/20/fdic-announces-agreement-to-sell-signature-bank-assets.html)over the weekend) surged 31.65%, PacWest Bancorp jumped 10.78% and KeyCorp edged up 1.21%. Some bank stocks are in the doldrums, yes, but the SPDR S&P Regional Banking ETF, a fund of regional bank stocks, rose 1.11% on Monday. To stem the rout, [JPMorgan Chase is advising First Republic](https://www.cnbc.com/2023/03/20/jpmorgan-advising-first-republic-on-strategic-alternatives-including-a-capital-raise-sources-say.html)on strategic alternatives such as raising capital or attempting a sale, sources told CNBC's David Faber. The Dow Jones Industrial Average gained 1.2%, the S&P 500 added 0.89% and the Nasdaq Composite increased 0.39%. Banking stocks in the [pan-European index, Stoxx 600](https://www.cnbc.com/2023/03/20/european-markets-live-updates-ubs-buys-credit-suisse-news-stocks.html), were up 1.3%, giving the index a 1% gain.

S&P/ASX 200 Index (ASX: XJO) investors beware. The Swiss government-backed UBS takeover of Credit Suisse is bending long-held rules.

The AT1 market will be shut now for new issuance for a while. Common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier 1 be required to be written down. [banks](https://www.fool.com.au/investing-education/bank-shares/)) to [acquire funding](https://www.bloomberg.com/news/articles/2023-03-20/wipeout-of-risky-credit-suisse-bonds-upends-275-billion-market?sref=4jN770vD) at a time when the global financial sector is reeling. [hierarchy](https://www.reuters.com/business/finance/bank-england-says-shares-should-be-wiped-out-ahead-bonds-2023-03-20/),” the BoE said (courtesy of Reuters). [bonds](https://www.fool.com.au/definitions/bonds/) likely to become worthless. [reported yesterday](https://www.fool.com.au/2023/03/20/ubs-to-acquire-credit-suisse-heres-what-you-need-to-know/), UBS will acquire Credit Suisse in an all-share transaction worth about CHF3 billion (AU$4.8 billion) in a deal backstopped by the Swiss government and Swiss central bank.

Depositors have escaped unscathed from the collapse of Credit Suisse and the US banks – investors not so much.

[UBS takeover of Credit Suisse aims to halt crisis](https://www.afr.com/companies/financial-services/credit-suisse-s-investment-bank-to-shrink-under-swiss-megadeal-20230320-p5ctik)UBS will look to cut nearly $12 billion in costs after buying the besieged lender, and a chunk of that could come from investment banking. Echoes of GFC get louder as Credit Suisse falls](https://www.afr.com/chanticleer/echoes-of-gfc-get-louder-as-credit-suisse-falls-20230320-p5ctje)The rescue of Credit Suisse by UBS and moves by central banks to bolster global banking sector liquidity should calm the market. [Switzerland suddenly looks like a ‘banana republic’ in a crisis](https://www.afr.com/world/europe/switzerland-suddenly-looks-like-a-banana-republic-in-a-crisis-20230321-p5ctwa)The response of Swiss regulators to the Credit Suisse crisis raises questions over the nation’s self-proclaimed reputation as a haven of legal certainty for bond and equity investors. [Investors in limbo as trust in market values wavers](https://www.afr.com/companies/financial-services/investors-in-limbo-as-trust-in-market-values-wavers-20230321-p5ctue)Investors are unsure if market laws still apply after Swiss authorities allowed the Credit Suisse takeover to wipeout the ailing bank’s bonds. [Why central banks rushed to defend credit markets - from the Swiss](https://www.afr.com/companies/financial-services/why-central-banks-rushed-to-defend-credit-markets-from-the-swiss-20230321-p5ctuv)By wiping out Credit Suisse hybrid investors at the expense of shareholders, Swiss regulators almost did more harm to the global banking system. [Fundies say UBS-Credit Suisse deal should contain crisis](https://www.afr.com/markets/equity-markets/fundies-say-ubs-credit-suisse-deal-should-contain-crisis-20230320-p5ctm2)Investor attention is now turning to a possible repricing of risk in bond markets and how central banks will respond. [S&P sees ‘material execution risk’ in UBS takeover of Credit Suisse](https://www.afr.com/companies/financial-services/s-and-p-sees-material-execution-risk-in-ubs-takeover-of-credit-suisse-20230321-p5cttu)S&P Global Ratings said it revised its outlook on UBS Group to negative from stable, reflecting pressure on the group’s stand-alone creditworthiness. It also had the biggest unrealised losses as a percentage of Common Equity Tier 1 capital (CET1) – the highest quality of regulatory capital. “This [banking crisis] is all a response to the debt build-up in the country. Just a message on his banking app with a picture of the sun rising somewhere over the Swiss Alps. Your accounts and cards can be used as usual as can your online and mobile banking,” the message said. When a Credit Suisse depositor and friend of mine awoke on Monday morning there was no email explaining how the 167-year-old bank had suddenly come to end.

Credit Suisse's domestic business and its investment bank, which collectively employ more than 30,000 staff, are expected to bear the brunt of the cuts, ...

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Investors and employees at Swiss bank Credit Suisse are growing nervous following the news that the financial institution has collapsed.

Questions listed among the FAQ on the company’s website include “Do I still have a job?”, “Will my salary and any bonus still get paid?”, I am a contract worker with Credit Suisse. She said the decisions taken in Bern “are instrumental for restoring orderly market conditions and ensuring financial stability”. A frequently asked question guide for Credit Suisse staff has also highlighted concerns employees are facing, including the possibilities of lay-offs, and not receiving their shares, promotions or bonuses now that the merger is underway. At time of writing, Credit Suisse was down 55 per cent while UBS took a 1.26 per cent hit. Swiss Finance Minister Karin Keller-Sutter said that bankruptcy for Credit Suisse could have caused “irreparable economic turmoil” and “huge collateral damage” for the Swiss financial market, not to mention the “risk of contagion” for other banks, including UBS itself. Will you honour my contract to its end-date?”, “Will I receive a bonus for my hard work through 2023?” and “What happens to my Credit Suisse vested stock?”, among others.