According to reports, Switzerland is getting ready to use emergency measures. Three persons with knowledge of the situation claimed to have made this assertion, and they have added that the move was done to expedite UBS’s acquisition of Credit Suisse as the banks and their regulators’ race to complete a merger agreement before the markets open on Monday.
According to sources, UBS would be required by Swiss law to allow shareholders six weeks to express their opinions on the acquisition. According to reports, this would unite Switzerland’s two largest lenders.
More Details About the Emergency Measures
As previously stated, three sources acquainted with the situation have indicated that the aforementioned emergency steps would be utilized to bypass the consultation period and pass the merger without a shareholder vote. Despite the fact that some people have highlighted that other elements are still being worked out.
According to reports, Finma Switzerland’s regulator did not reply promptly to demands for comment, while the Swiss central bank, Credit Suisse, and UBS declined to comment. On the other side, the Swiss National Bank and regulator Finma is said to have advised overseas peers that a merger with UBS is the only way to stop a decline in confidence in Credit Suisse. Furthermore, the aforementioned two were attempting to strike a regulatory agreement by Saturday night.
UBS announced that it will follow Credit Suisse’s objectives, which include downsizing its investment bank. According to two of the people, the combined entity will make up little more than a third of the united group.
Swiss Government Debates on Credit Suisse’s Future
According to reports, the Swiss government had an emergency meeting on Saturday evening. The purpose of the gathering was to debate Credit Suisse’s future. In which the cabinet is said to have gathered in Bern’s finance ministry for a series of speeches by government officials, the Swiss National Bank, market regulator Finma, and banking sector representatives.
The boards of the two banks, on the other hand, are said to be meeting this weekend. While Credit Suisse’s primary regulators in the United States, the United Kingdom, and Switzerland review the legal structure of a deal and significant concessions sought by UBS.
It has been reported that UBS has chosen to allow for the phasing of any capital requirement imposed by global capital rules for the world’s largest banks. In addition, UBS has asked for some kind of indemnity or government agreement to fund future legal costs. While Credit Suisse has decided to set aside SFr1.2 billion in legal provisions for 2022, it has also warned that unresolved lawsuits and regulatory investigations might add another SFr1.2 billion.
