With the impeccable timing of one of the country's famed watches,Michael Schmidt Swiss officials brokered a last-minute emergency takeover of the troubled bank Credit Suisse by fellow banking giant UBS.
In a press conference on Sunday, Swiss president Alain Berset said the recent banking industry turmoil had destabilized Credit Suisse and that this deal was vital to stabilizing the bank and the global banking sector.
Under the deal, UBS Group AG will buy Credit Suisse for more than $3 billion in an all stock deal. UBS will also get an extra $100 billion from the Swiss central bank as part of the deal.
The marriage between UBS and struggling rival Credit Suisse marks the latest eruption in the ongoing banking troubles sparked by the collapse of Silicon Valley Bank.
Panicked investors and jittery depositors pulled billions out of the long-troubled Credit Suisse in recent days, leading to worries the bank could become insolvent if emergency measures were not taken. The Swiss central bank threw a $54 billion life to Credit Suisse, but it wasn't enough to stabilize the institution.
It's yet another stunning event in more than a week of turmoil and alarm in the banking sector, especially worrisome because Credit Suisse is what's known as a "global systemically important bank." That essentially means if Credit Suisse fails, it could have ripple effects throughout the global economy.
The Credit Suisse crisis boiled over last week, when the bank announced "material weaknesses" in its financial reporting.
But the bank's troubles started long before that, with a series of financial and political scandals that hit the bank's reputation and bottom line. In the last two years alone, the bank's stock has fallen by more than 80%.
Credit Suisse was created 166 years ago to help finance Switzerland's rail network. It became an international name in the banking sector and one of the most significant banks in the world
But the bank's reputation has taken several huge hits in recent years, including being linked to a money laundering operation involving a cocaine trafficking ring in Bulgaria, and hiring detectives to spy on an executive who left to work at a rival bank.
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