Merging Together

Merging Together

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  • UBS (UBS) is close to inking a deal that could be a game changer for the Swiss banking system: acquiring Credit Suisse (CS) in a move to restore confidence in the financial system, according to sources. Last week, Credit Suisse resorted to the Swiss National Bank's liquidity lifeline of over $50 billion in the face of deepening concerns over its future. Unfortunately, the move was not enough to stop the plummeting of its stocks or the outflow of deposits, leading the central bank and the country's top financial regulator to collaborate with Credit Suisse's rival, UBS.
  • The boards of UBS and Credit Suisse are set to come together and decide just how much of the troubled lender UBS will take under its wings. Reports suggest a range of possibilities are on the table, including an all-encompassing takeover, or one that only involves small parts of the bank. If UBS were to take the latter route, its investment-banking arm would likely be reduced in size.

Why it matters

Credit Suisse's 167-year tenure is about to come to an end - a landmark event in the banking industry since the 2008 financial crisis. The sudden failure of Silicon Valley Bank earlier this month has brought on a wave of financial destruction, with a potential merger between UBS and Credit Suisse creating one of the world's biggest financial giants, with around $1.1 trillion of assets and $575 billion respectively.


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