UBS Takeover Of Credit Suisse Seen Imminent
"I can't imagine the Swiss authorities won't do anything in the event of a real problem," Belgian central bank chief and ECB Governing Council member Pierre Wunsch told business newspaper L'Echo.
Wunsch was referring, of course, to a thunderstorm of rumors about the fate of Credit Suisse following an existential week during which the bank's shares and bonds plunged, and peers reportedly curbed trading, after an errant remark from Saudi National Bank Chairman Ammar Al Khudairy sparked a panic.
I know nothing about Swiss politics or their internal banking regulations, but can the Swiss government give UBS an offer they can’t refuse?
I think so, yes. I mean, with the caveat that I obviously can’t speak for the Swiss government.
Swiss ought to form a bad bank for credit suisse. Spin out the domestic bank, put the rest into bad bank and sell, spin off or wind it down. UBS made a cheap bid, they were not really interested in getting involved.
After the events of Sunday morning (in the States), UBS looks like they really didn’t want to get involved. “If A, B, C, and D happen we will buy at an 85% discount.”
This implies to me that 1) Either UBS doesn’t know enough, at the moment, to make a better offer, or 2) they do know enough of the CS situation and, even with some pressure from the Swiss government, went real cheap with some caveats because it must be a debacle.