The governor of the Bank of France assured this Monday that the problems in the Credit Suisse bank and the failures in the North American regulatory system “do not affect French and European banks.”
French banks are very solid” and “none of these problems affect French banks,” François Villeroy de Galhau told France Inter, a day after the announcement of the banking group’s purchase of Credit Suisse, in great difficulty. Swiss UBS.
The Saudi National Bank also assured that the acquisition of Credit Suisse will not have “no impact” in the growth plan. The transaction will be worth 3,000 million Swiss francs (3,020 million euros), paid in UBS shares.
UBS reaches an agreement to buy Credit Suisse for 3,000 million euros
Credit Suisse said that, taking into account the “unique circumstances affecting the Swiss economy as a whole“, the Swiss Federal Council issued an emergency ordinance for this specific transaction, according to a statement.
More importantly, the merger will be implemented without the necessary approval from UBS and Credit Suisse shareholders to increase the certainty of the deal,” it said, adding that the parties expect the transaction to close by the end of 2023.
The merger between these banking giants, which are part of the club of 30 banks considered too big to fail, was closed and announced before the opening of the Asian markets, trying to avoid panic.
UBS is in talks to buy Credit Suisse, says the Financial Times
The banking sector has been under pressure since the big central banks started raising interest rates sharply to control inflation. Many banks did not prepareafter years of cheap money.
The recent collapse of Silicon Valley Bank and other regional banks in the United States has increased investor anxiety and led them to sell the bonds of banks considered weaker.
Silicon Valley Bank. How the biggest banking collapse since the 2008 financial crisis unfolded
In the case of Credit Suisse, which endured two difficult years and a few scandals, leadership efforts to come up with a three-year restructuring plan were of little avail.
UBS will now benefit from a nine billion Swiss franc (9.11 million euro) guarantee from the government, which will serve as insurance if problems are discovered in very specific Credit Suisse portfolios.
The central bank also announced a liquidity facility of up to 100 billion Swiss francs (102 billion euros) for UBS and Credit Suisse.
Source: Observadora
