(Reuters) – Credit Suisse Group AG (CSGN.S) is wary of doing business with Swiss banks where some of its competitors are in trouble, prompting regulators to cut deals with UBS AG. After urging the company to pursue it, it headed for a weekend of success or failure. (UBSG.S).
Credit Suisse Chief Financial Officer Dixit Joshi and his team will meet over the weekend to assess the bank’s strategic scenario, people familiar with the matter said on Friday.
Swiss regulators are encouraging a merger between UBS and Credit Suisse, said a source familiar with the matter, adding that the banks do not want a merger. Regulators have no power to force a merger, the people said.
The boards of UBS and Credit Suisse were also scheduled to meet separately over the weekend, according to the Financial Times.
Credit Suisse shares surged 9% in aftermarket trading following the FT report. Credit Suisse and UBS declined to comment for the report.
Credit Suisse, a 167-year-old bank, is the biggest name caught in the market turmoil unleashed by the collapses of U.S. lenders Silicon Valley Bank and Signature Bank in the past week. It was forced to raise $54 billion from banks.
At least four major banks, including Societe Generale (SOGN.PA) and Deutsche Bank (DBKGn.DE), have imposed restrictions on transactions involving Swiss banks or their securities. 5 sources with first-hand knowledge of this issue.
“Credit Suisse is a very special case,” said Frederick Carrier, head of investment strategy at RBC Wealth Management. “Additional measures are being discussed as they may not be sufficient to restore confidence in Switzerland.”
The desperate effort to strengthen Credit Suisse comes as policymakers such as the European Central Bank and US President Joe Biden seek to reassure investors and depositors that the global banking system is safe. It happens when However, concerns persist about broader problems within the sector.
Already this week, the big U.S. banks were forced to provide a $30 billion lifeline to smaller lenders First Republic (FRC.N), and U.S. banks have in recent days pushed the Federal Reserve to It was seeking a record $153 billion in emergency liquidity from the Fed’s Board of Directors.
This surpassed previous highs during the deepest phase of the financial crisis some 15 years ago.
Ratings agency Moody’s downgraded its outlook for the U.S. banking system to negative this week.
In Washington, the focus shifted to increased oversight to ensure that banks and their executives are held accountable.
Biden promised Americans earlier this week that their deposits would be safe, according to a White House statement.
[1/3] A view of the Credit Suisse office in Singapore on March 16, 2023. REUTERS/Caroline Chia
A group of Democratic US lawmakers has also urged regulators and the Justice Department to investigate the role of Goldman Sachs (GS.N) in the collapse of the SVB, the office of US Rep. Adam Schiff said Friday. .
Market troubles linger
Bank stocks have taken a beating around the world since the collapse of the Silicon Valley Bank, raising questions about other weaknesses in the broader financial system.
Shares of Credit Suisse, Switzerland’s second-largest bank, fell 8% on Friday, with Morningstar Direct predicting that Credit Suisse will pull in $450 million from its U.S. and European funds under management between March 13 and 15. I said I saw more than a net outflow.
Analysts, investors and bankers said the facility from the Swiss Central Bank was the first major global bank to take emergency relief measures since the 2008 financial crisis, but it’s time to think about what to do next. I think I just earned it.
In an investor report, DBRS Morningstar said that while heightened financial volatility and uncertainty over the future of Credit Suisse could cloud the outlook for the Swiss economy, the liquidity support provided to the banks could affect the country’s finances. He points out that the impact is unlikely.
US regional bank stocks plunged Friday, with the S&P Bank Index (.SPXBK) down 4.6%, down 21.5% over the past two weeks. March 2020.
First Republic Bank closed Friday down 32.8%, taking its last 10 trading losses to more than 80%.
Support from some of the U.S. banking giants averted a collapse this week, but investors were surprised by recent disclosures about the First Republic’s cash position and emergency liquidity needs.
“It appears to have damaged the reputation of the First Republic brand. Told.
Earlier on Friday, SVB Financial Group said it had filed for a court-supervised reorganization, days after its former banking arm, SVB, was acquired by US regulators.
Regulators are asking banks interested in acquiring SVB and Signature Bank to submit their bids by Friday, said a person familiar with the matter. U.S. regulators are open to considering the government backing losses at her SVB and Signature Bank, the Financial Times reported on Friday.
Authorities have repeatedly emphasized that the current turmoil differs from the global financial crisis of 15 years ago as banks are well capitalized and funds are more readily available. Their assurances often fell on deaf ears.
In an unusual move, the ECB held its second ad hoc supervisory board meeting this week to discuss stress and volatility in the banking sector.
Supervisors were told deposits were stable across the euro zone and that exposure to Credit Suisse was not material, a source familiar with the meeting told Reuters.
An ECB spokeswoman declined to comment.
Pete Schroeder, Jeff Mason and Kostas Pitas from Washington; Shankar Ramakrishnan and Chuck Mikolayczak from New York; Schmied Chatterjee and Joyce Alves from London; Alexandra Hudson from Zurich; Francesco Canepa from Frankfurt; Bengaluru Reporting by Noel Landewicz, Oakland, California; Writing by Deepa Babington, Sam Holmes, Alexander Smith; Editing by Anna Driver, Matthew Lewis, Diane Craft
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