FT News Briefing UBS agrees to buy Credit Suisse
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Mar 20, 2023 UBS's urgent acquisition of Credit Suisse for $3.25 billion has sent shockwaves through the banking industry, highlighting regulatory involvement and potential repercussions. Central banks are stepping in to stabilize markets and address liquidity concerns, while discussions around expanding deposit guarantees gain momentum. Startups are reassessing risk management strategies in light of the Silicon Valley Bank collapse, emphasizing the importance of diversifying banking partnerships to navigate future uncertainties.
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Swiss Banking Crisis
- Credit Suisse, Switzerland's second-largest bank, faced a crisis as nervous customers withdrew funds and investors sold shares.
- Swiss authorities orchestrated a merger with UBS to stabilize the situation.
UBS Acquisition of Credit Suisse
- Swiss authorities brokered a deal for UBS to acquire Credit Suisse for $3.25 billion.
- This was a drastic measure to prevent further collapse and potential contagion.
Central Bank Intervention
- The Credit Suisse deal led to losses for shareholders and bondholders.
- Major central banks announced plans to improve U.S. dollar liquidity to prevent market stress.