Switzerland’s biggest bank UBS agrees to take over troubled Credit Suisse in emergency rescue deal

The Swiss National Bank said that UBS would be taking over embattled lender Credit Suisse. The announcement came after a weekend of emergency talks in Switzerland between the two banks and the country’s financial regulators. The Swiss National Bank said, the deal was the best way to restore the confidence of financial markets and to manage risks to the economy. Swiss President Alain Berset said that the Swiss Federal Council welcomed the takeover as it was the best solution to restore and strengthen market confidence in Credit Suisse and the Swiss financial center.

However, the Swiss Government and banking officials had been locked in urgent talks to rescue the embattled lender, which was given a 54 billion dollar lifeline by the country’s central bank this week. Swiss Finance Minister Karin Keller-Sutter said that the government in Bern had agreed to provide guarantees of up to 9 billion Swiss francs to underwrite the takeover. However, The US Federal Reserve and other central banks also sought yesterday to ease fears through a coordinated effort to increase liquidity in the banking sector. The British, Canadian, Swiss, and EU central banks are reportedly involved in the effort to step up access to dollars in swap line operations.