Troubled Credit Suisse and UBS to discuss possible merger again over the weekend after encouragement from regulators

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18th March 2023 – (New York) Over the past week, Credit Suisse, the 167-year-old bank, has been plunged into a crisis following the collapse of U.S. lenders Silicon Valley Bank and Signature Bank, forcing it to seek US$54 billion in central bank funding. Amid fears of broader troubles in the banking sector, the European Central Bank and U.S. President Joe Biden have sought to reassure investors and depositors that the global banking system is safe.

However, Credit Suisse’s mounting troubles have caused at least four major banks, including Societe Generale SA and Deutsche Bank AG, to put restrictions on their trades involving the Swiss lender or its securities. Frantic efforts to shore up the bank have been made, with Credit Suisse’s Chief Financial Officer Dixit Joshi and his team holding meetings over the weekend to assess strategic scenarios.

Regulators are encouraging UBS and Credit Suisse to merge, but both banks have reportedly declined.

Nevertheless, the boards of UBS and Credit Suisse were expected to separately meet over the weekend, according to the Financial Times. As policymakers focus on greater oversight, Biden has called on Congress to give regulators greater power over the banking sector. Analysts, investors, and bankers think the loan facility from the Swiss central bank only bought Credit Suisse time to work out what to do next. Shares in Credit Suisse closed down 8% on Friday, while the S&P Banks index tumbled 4.6%, bringing its decline over the past two weeks to 21.5%, its worst two-week calendar loss since the COVID-19 pandemic shook markets in March 2020.