UBS AG was examining on Saturday a takeover of its embattled Swiss peer Credit Suisse, sources said, a move that could allay fears that an unfolding crisis may destabilise the global banking system.

The 167-year-old Credit Suisse is the biggest name ensnared in the market turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week, during which the Swiss bank lost a quarter of its stock market value.

To get the crisis under control, UBS was coming under pressure from the Swiss authorities to carry out a takeover of its local rival, two people with knowledge of the matter said.

The plan could see the Swiss government offer a guarantee against the risks involved, while Credit Suisse’s Swiss business could be spun off. UBS, Credit Suisse and Switzerland’s financial regulator Finma declined to comment.

The Financial Times cited people familiar with the matter as saying UBS, Credit Suisse and regulators were rushing to finalise a deal on a merger as soon as Saturday evening. Credit Suisse Chief Financial Officer Dixit Joshi and his teams were meeting over the weekend to assess their options for the bank, and there were multiple reports of interest from rivals.

US financial giant BlackRock said it had no interest in a rival bid for Credit Suisse, while Bloomberg reported that Deutsche Bank was looking at buying some of the bank’s assets.

Published in The Express Tribune, March 19th, 2023.

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