Credit Suisse's demise seems unavoidable at this point. Parties are working around the clock to solve the crisis while UBS reportedly stands firm on a number of conditions.
Switzerland's two largest banks, UBS and Credit Suisse, reportedly continue to work together with key regulatory bodies on a historic transaction, which is expected to close imminently, numerous media around the world are reporting.
The «Financial Times» (behind paywall) indicated that all the parties involved are meeting over the weekend to make final preparations before an announcement is made before the markets open on Monday (20 March).
Only Option
According to the newspaper, a deal involving UBS was seen as the «only option» by the Swiss National Bank and the Swiss Financial Market Supervisory Authority (Finma) and they have said as much to other involved regulatory bodies worldwide. According to the FT, citing two people familiar with the situation, deposit outflows at Credit Suisse were continuing and exceeded $10.8 billion a day last week.
UBS has also set a number of conditions related to any deal. As part of that, the FT reported indications that UBS wants to be in a position to phase in any further demands on global capital rules for systemically relevant institutions and that it also requested indemnities or agreements from the Swiss government related to potential legal costs.
Numerous Legal Cases
Credit Suisse remains a party in numerous lawsuits after having disclosed $1.3 billion in legal provisions in 2022.
Still, it should be kept in mind that the possibility of a merger between both banks remains pure speculation at this time. No relevant authority or government official, at least in Switzerland, have commented on the situation. In addition, none of the involved parties have stated a position or stance yet.
