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Analysis: UBS Swallows Doomed Credit Suisse, Casting Shadow Over Switzerland

LONDON, March 20 (Reuters) – UBS Group (UBSG.S) emerged as Switzerland’s one and only global bank with a state-backed rescue of its smaller peer Credit Suisse, a risky bet that makes the Swiss economy more dependent on a single lender.

The unprecedented move announced late on Sunday in Zurich capped a race against time by regulators to avert a meltdown in global markets. Switzerland is pledging more than 160 billion francs ($173 billion) in loans and guarantees to underpin the new group, guarding against further risks undermining the lender.

Full coverage: REUTERS

Bank Shares Plummet As Credit Suisse Rescue Fails to Quell Contagion Fears

March 20 (Reuters) – Banking stocks and bonds plummeted on Monday as the hit to investors from UBS Group’s state-backed takeover of Credit Suisse fanned concerns about the health of the global banking sector.

UBS shares fell by as much as 16% in early trade, their biggest one-day fall since 2008, amid concerns among investors about the long-term benefits of the deal and the outlook for banks in Switzerland, a country once seen a paragon of sound banking.

Full coverage: REUTERS

Investors Punish UBS After Credit Suisse Rescue, Shares Plummet

LONDON/ZURICH, March 20 (Reuters) – Shares in UBS (UBSG.S) plunged on Monday, heading for their biggest one-day fall since 2008 after its weekend rescue of ailing rival Credit Suisse (CSGN.S) ignited concerns among investors about the long-term benefits of the deal.

UBS, with a hefty backstop from Swiss authorities, agreed to buy Credit Suisse on Sunday for just a fraction of its market value in a package orchestrated by Swiss regulators.

Full coverage: REUTERS

European Bank Shares Slide After Credit Suisse Rescue

LONDON, March 20 (Reuters) – European share markets opened sharply lower and government bonds and gold rallied in a rush for safety on Monday as the emergency weekend rescue of banking heavyweight Credit Suisse left the financial system facing widespread uncertainty.

Sunday had seen the most dramatic intervention since the global financial crisis with UBS buying Credit Suisse for 3 billion francs ($3.2 billion) in a shotgun wedding and the world’s top central banks pledging daily dollar funding offerings.

Full coverage: REUTERS

Morning Bid: Investors Adopt The Brace Position As Banks Topple

A look at the day ahead in European and global markets from Wayne Cole

During the last big banking crises, an analyst was asked by a TV anchor what position he would recommend for investors? “Fetal” was his terse answer.

That pretty much sums up the reaction in Asian markets to the extraordinary government-engineered takeover of the storied Credit Suisse by UBS, along with a U.S. dollar supply operation by a Fed-led posse of major central banks. Incidentally, the BOJ’s US$ tender today found no takers, suggesting there’s no dollar drought in Asia as yet.

Full coverage: REUTERS

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Industry Dynamics

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