The Swiss National Bank and Swiss regulator Finma have told their international counterparts that they regard a merger deal with UBS as the only option to arrest a collapse in confidence in Credit Suisse, UK's Financial Times reported on Saturday.
UBS Group AG, Credit Suisse Group and key regulators are rushing to finalise a deal on the merger of the two Swiss banks as soon as Saturday evening, the FT reported, citing people familiar with the matter.
The race for a deal comes days after the Swiss central bank was forced to provide an emergency $54-billion credit line to Credit Suisse.
Earlier on Saturday, Reuters reported UBS is examining a takeover of Credit Suisse, which could see the Swiss government offer a guarantee against the risks involved.
Sourced told Reuters UBS was coming under pressure from the Swiss authorities to carry out a takeover. Under the plan, Credit Suisse's Swiss business could be spun off, they added.
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Regulators have urged Credit Suisse Group to pursue a deal with Swiss rival UBS as the troubled bank began a make-or-break weekend after some rivals grew cautious in their dealings with it.
Credit Suisse Chief Financial Officer Dixit Joshi and his teams will hold meetings over the weekend to assess the bank's options, people with knowledge of the matter said on Friday.
The 167-year-old bank is the biggest name ensnared in the market turmoil unleashed by the collapse of U.S. lenders Silicon Valley Bank and Signature Bank over the past week.
Dating back to the mid-nineteenth century, UBS is Switzerland's biggest bank with a market value of 60 billion Swiss francs ($65 billion) and the world's largest wealth manager.
UBS itself has had its own tumultuous periods, with a clampdown on banking secrecy and a bailout during the global financial crisis more than a decade ago.
It went through several restructurings, cutting thousands of jobs, and pared back the investment bank to reduce risk and improve returns.
A full merger between UBS and Credit Suisse would create one of the biggest global systemically important financial institutions in Europe. UBS has $1.1 trillion total assets on its balance sheet and Credit Suisse has $575 billion.
At least four major banks, including Societe Generale and Deutsche Bank, are restricting new trades involving Credit Suisse or its securities, five sources told Reuters.
US investment giant BlackRock denied a report in the Financial Times that it was participating in a rival bid for all or parts of Credit Suisse.
ECB Governing Council member Pierre Wunsch does not expect a repeat of the 2008 financial crisis despite turbulence caused by the collapse of Silicon Valley Bank, arguing European banks were subject to tougher rules than regional US banks.
With inputs from Reuters
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