The SNB said Thursday that the UBS takeover of the bankrupt Credit Suisse was orchestrated to preserve financial stability not only in Switzerland but around the globe.
“Going into resolution would have triggered a larger financial crisis, not only in Switzerland but most likely globally,” Swiss National Bank chairman Thomas Jordan said during a press conference at the SNB headquarters in Zurich, adding, “The focus has to be ensuring that we can maintain financial stability under all circumstances.”
“An insolvency of Credit Suisse would have had severe consequences for national and international financial stability and for the Swiss economy,” said Thomas Jordan, chairman of the SNB governing board. “Taking this risk would have been irresponsible.”
The hastily arranged, $3.25 billion deal aimed to stem the upheaval in the global financial system after the collapse of two U.S. banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland’s second-largest bank to tank and customers to pull out their money.
UBS takeover of Credit Suisse
Swiss authorities urged UBS to take over its smaller rival after the central bank’s plan for Credit Suisse to borrow up to 50 billion francs ($54 billion) last week failed to reassure investors and custom ..
Switzerland’s central bank, financial markets regulator and government faced implicit criticism from eurozone authorities over their rescue of troubled lender Credit Suisse this weekend.
The Swiss National Bank and Finma announced on March 19 that they had approved UBS’s takeover of Credit Suisse. “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability. And protect the Swiss economy in this exceptional situation,” the SNB said earlier.
Overall, however, the major European stock markets remained stable thanks to utility and heavyweight mining company price increases.
On Monday, demand from investors seeking safe havens helped gold reach its highest price in more than a year.
The price of the precious metal, which is regarded as a secure store of worth during difficult economic times, rose to $2,009.73.
Since the beginning of Russia’s assault of Ukraine a little more than a year ago, it was at its highest level.
