Your Money
UBS Group AG agreed to take over its longtime rival Credit Suisse Group AG for more than $3 billion on Sunday. The deal between the Swiss banks is the first megamerger of systemically important global banks since the 2008 financial crisis. The news also comes on the heels of the US regional banking woes that have shaken confidence in the worldwide banking system.
Swiss authorities were pressured to make the deal happen before Asian markets opened for the week. They had to walk a fine line, getting the two banks’ boards to agree to the deal and avoiding the alternative, a regulator-led winddown of Credit Suisse, which could have proven more protracted and painful for the financial system.
Later Sunday night, Goldman Sachs noted that the Swiss deal clarifies the crisis and reduces tail risk events. Still, details remain to be worked out, and risks remain.
At PWM, we are in the camp that the Silicon Valley Bank, Frist Republic, and now Credit Suisse events are more specific concerns than systematic ones. We think the strong institutions will not only survive but come out stronger with less competition in the end.
UBS Agrees to Buy Credit Suisse for More Than $3 Billion
by Margot Patrick, Ben Dummett, Dana Cimilluca, and Patricia Kowsmann
|