UBS reportedly seeks $6 billion in government guarantees for Credit Suisse takeover

UBS reports its latest earnings

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UBS is asking the Swiss government to pay about $6 billion in costs if it buys Credit SuisseA person familiar with the negotiations said, because of the two sides race to reach an agreement together to restore confidence in the ailing Swiss bank.

167-year-old Credit Suisse is the biggest name caught in the turmoil caused by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week, causing a plunge in bank shares and sending The authorities must urgently come up with extraordinary measures to keep them. floating bank.

The two told Reuters that the $6 billion government bail UBS is seeking would cover the cost of recalling Credit Suisse parts and potential litigation fees.

One of the sources warned that talks to resolve the crisis of confidence in Credit Suisse are facing significant setbacks and 10,000 jobs could be cut if the two banks come together.

Swiss regulators are racing to come up with a resolution to Credit Suisse before the market reopens on Monday, but the complexity of combining the two giants raises the possibility of negotiations will last until Sunday, said a person who asked to remain anonymous because of the sensitivity of the case. situation.

Credit Suisse, UBS and the Swiss government declined to comment.

The frenetic talks over the weekend come after a brutal week for bank stocks and efforts in Europe and the US to shore up the sector. Our President by Joe Biden The government moved to support consumer deposits while the Swiss central bank loaned Credit Suisse billions of dollars to stabilize its wobbly balance sheet.

UBS has been under pressure from Swiss authorities to make a takeover of its local rival to keep the crisis under control, two people with knowledge of the matter said. The plan could cause Credit Suisse’s Swiss business to be spun off.

The Financial Times reports that Switzerland is preparing to use emergency measures to speed up the deal.

US authorities are involved, working with their Swiss counterparts to help broker a deal, Bloomberg News reported, citing people familiar with the matter.

British finance minister Jeremy Hunt and Bank of England Governor Andrew Bailey were also in regular communication this weekend about the fate of Credit Suisse, a source familiar with the matter said. Spokespersons for the Treasury and the Bank of England’s Prudential Regulation Authority, which oversees lenders, declined to comment.

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