BREAKING NEWS
The deal could lead to
thousands of job losses for Credit Suisse, according to Switzerland's finance
minister. UBS and the bank are both in trouble.
The global banking system is struggling to
navigate uncharted territory and extremely volatile waters. In an attempt to
calm investors and customers, the Swiss government has bought the troubled
Swiss bank Credit Suisse.
To facilitate the deal and increase liquidity,
the Swiss National Bank would provide loans of up to $108 million to the two
Swiss banks. UBS would also receive a financial guarantee of $10 billion from
the Swiss government in case of losses resulting from Credit Suisse's takeover.
Janet Yellen, U. S. Treasury Secretary, and
Jerome Powell, Federal Reserve Chairperson, said that the Credit Suisse
acquisition was a positive development for the U. S. financial sector. The
Federal Reserve worked closely with the Swiss National Bank to merge the two
Swiss-based banks.
According to The Street, the Swiss National Bank
stated that the solution was found to ensure financial stability and protect
the Swiss economy during this extraordinary situation with the acquisition of
Credit Suisse by UBS.
Keller-Sutter expressed concern that the deal
could lead to "many thousand" layoffs in Credit Suisse employees in
Switzerland. The two banks offer similar products and services.
Credit Suisse had announced a reduction of
approximately 9,000 jobs in October 2022, just months before it fell into
crisis. The company had over 50,000 employees around the world by the end of
last, with 16,000 in Switzerland. Its balance sheet was worth half a billion
dollars.
UBS data showed that the company had over 74,000
employees. This is more than its acquired bank. 28% of its workforce is based
in Switzerland. Its total assets amounted to $1.1 billion.
After a series of controversies that beset
Credit Suisse, Saudi National Bank (the embattled Swiss bank's main backer)
announced that it would no longer invest in Credit Suisse to avoid tripping
regulatory requirements that would kick into effect if its stake increased by
10%. Credit Suisse stock shares fell after the announcement.
0 Comments