Thousands of City jobs at risk in race to rescue Credit Suisse
Thousands of City jobs are at risk as regulators race to rescue one of the world’s biggest banks before markets open Monday morning.
Officials and bankers are scrambling to secure a merciless takeover of Credit Suisse, a Swiss lender with a balance sheet of more than £470bn, after a disastrous week in which shares The stock fell by almost a fifth and speculation increased about its future.
The Swiss authorities are trying to drive through a Bank takeover by rival UBS after coming to the conclusion that it was the only option capable of guaranteeing long-term stability. An agreement could be signed as soon as Saturday night, with the boards of both banks meeting behind closed doors over the weekend.
It is feared that a failure to reach an agreement by Monday morning will send stocks plunging further, with dire consequences in markets around the world.
A previous attempt to restore market confidence by injecting $54bn (£44bn) into Credit Suisse with an emergency loan from the Swiss central bank failed to calm nerves on Wednesday, sending stocks deeper in the following days.
The negotiations are being closely monitored by the Bank of England, which is not the main regulator of both banks but is monitoring the potential consequences in the UK.
Credit Suisse and UBS employ about 10,000 people in London between them, with headquarters in Canary Wharf and Broadgate in the City respectively. Banking industry insiders expect one of the biggest contingency programs since the 2008 crisis if the takeover goes ahead.
The takeover would create one of the largest banks in the world, with a balance sheet of £1.3 trillion, more than twice the size of the Swiss economy – raising the question of whether whether it was successful or not. too big to rescue if the turmoil does not abate.
Parts of the bank are likely to be auctioned off by UBS in the coming weeks, with rival Deutsche Bank expressing an interest in some of UBS’ business.
According to the Financial Times, US investment firm Blackrock also considered acquiring Credit Suisse before ruling out an offer.