UBS to take over Credit Suisse, Swiss central bank confirms

UBS to take over Credit Suisse, Swiss central bank confirms

UBS will take over Credit Suisse, Swiss authorities have confirmed.

The deal to rescue the embattled lender includes 100bn Swiss francs in liquidity assistance for both banks.

In a statement, the Swiss central bank and other officials said that the agreement represented “a solution…to secure financial stability and protect the Swiss economy in this exceptional situation”.

The 167-year-old Credit Suisse was brought to the brink of financial calamity last week despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.

The credit line was agreed in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawal, prompting a request from the Swiss government for the rival UBS to consider a takeover.

It is hoped that securing Credit Suisse will avert the contagion of the kind seen in the financial crisis of 2008, when banks including Bear Sterns and Lehman Brothers collapsed.

Credit Suisse is one of the largest investment banking employers in the City of London, employing around 5,000 people.

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It comes after the collapse of Silicon Valley Bank in the US earlier this month.

The UK branch of SVB was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.