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The Swiss government is to hold a news conference after reports of UBS agreeing to buy the embattled Credit Suisse for more than $2bn.
The Financial Times reported on Sunday that a deal had been agreed after UBS upped its offer – however, both UBS and Credit Suisse declined to comment on the reports.
The potential emergency rescue comes after authorities raced over the weekend to secure the future of the 167-year-old bank, which is among the world’s largest wealth managers, in a move hoped to contain the industry’s biggest crisis since 2008 and avoid global market turmoil.
It would be the most significant global banking merger since the financial meltdown of 15 years ago.
It follows reports Credit Suisse had been resisting an offer from its bigger rival of up to $1bn, believing it to be too low and that it would hurt shareholders and employees who hold deferred stock.
As one of 30 global banks seen as systemically important, any deal for Credit Suisse could have major repercussions for
bank valuations.
As a last resort, Swiss authorities have reportedly considered a full or partial nationalisation of the bank.
As revealed by Sky News, the Bank of England is understood to have given its approval to the rescue deal earlier on Sunday.
Credit Suisse has been brought to the brink of financial collapse despite securing a $54bn (£44bn) credit line from Switzerland’s central bank several days ago.
The move, which was designed to reassure markets and depositors, failed to halt a rush of customer withdrawals, prompting a request from the Swiss government for UBS to explore a takeover.
Although Credit Suisse has a market capitalisation of just $8bn (£6.6bn) – down from close to $100bn (£82bn) at its 2007 peak – fears for its future had sent shockwaves through financial markets across the world.
Its vast investment bank balance sheet was reported to have been a stumbling block in the talks with UBS.
City sources said…
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