Illustration photo – Silicon Valley Bank sign in Frankfurt March 13, 2023.
Zurich/Washington – Swiss bank UBS asks Alpine country's government for guarantees in the amount of approximately six billion dollars (135 billion CZK) if it bought Credit Suisse, which had run into problems. Reuters reported this today, citing a person familiar with the negotiations. One of the sources also pointed out that 10,000 jobs may have to be cut if the two largest Swiss banks merge.
Government guarantees, according to UBS, should cover the costs of liquidating parts of Credit Suisse and any legal disputes.
According to the Financial Times (FT), the Swiss National Bank wants to find an uncomplicated solution to the current situation before the markets open on Monday. If the banks merge, it would be the largest banking merger in Europe since the financial crisis of 2008.
Credit Suisse announced this week that it will use the option to borrow up to 50 billion Swiss francs (1.2 trillion CZK) from the Swiss central bank to boost liquidity. According to a Reuters analysis, however, this is only buying time and, for example, the American investment bank JPMorgan considers a takeover by UBS to be the most likely scenario. over the past two years, it has identified serious deficiencies.
The financial markets have also been under tension in recent days due to the collapse of the American financial institutions Silicon Valley Bank (SVB) and Signature Bank. The development prompted US President Joe Biden to call on Congress on Friday to allow regulators to crack down on executives at failed banks. He also expressed his belief that the banking crisis has calmed down.
However, according to Reuters, concerns about broader problems in the banking sector remain. On Saturday, high-ranking representatives of the Biden administration also discussed the situation with well-known investor and billionaire Warren Buffett, the agency said.
First Citizens BancShares is considering a bid for the bankrupt bank SVB
American bank holding company First Citizens BancShares is considering making an offer to buy the bankrupt Silicon Valley Bank (SVB). This is reported today by the Bloomberg agency, according to which there is one more serious candidate in the game.
Offers for the takeover of the bank, over which the American Federal Deposit Insurance Corporation (FDIC) has control after the collapse, are to be submitted by today morning local time (afternoon CET). Based on them, the FDIC will decide whether to go the route of selling the entire financial company or dividing it into parts.
American authorities closed SVB last week. It was the largest bank failure in the US since the height of the financial crisis in 2008. Last weekend, the US authorities also took control of the Signature Bank financial institution, which raised concerns on the financial markets about the future development of the banking sector.
SVB lent money mainly to start-up technology companies, so-called start-ups. She estimated the value of assets and liabilities at up to ten billion dollars, liquidity at around USD 2.2 billion. At the end of last year, it had assets worth 209 billion dollars.