Credit Suisse has a deal with UBS for $ 3.2 billion in a rescue deal aimed at calming the financial market panic triggered by the current American banking crisis.
UBS bought Credit Suisse for 3 billion Swiss francs ($3.25 billion), which is about 60% less than the bank’s value at market close on Friday.
It is highly possible that the merger of Credit Suisse and UBS will result in the loss of thousands of jobs in the UK. Together, the two banks are responsible for the employment of around 11,000 people at this time.
UBS and CS are considered among the 30 most important banks in the international monetary system, with the two lenders’ combined assets of nearly $1.7 trillion.
Credit Suisse Reports Q4 Loss of $1 Billion
CS’s reported deficit for the fourth quarter was more than $1 billion, marking the bank’s biggest ever loss.
Under the terms of the all-share transaction, Credit Suisse shareholders will be entitled to receive one share from UBS for every 22.48 CS shares. It is expected that the transaction will be completed by the end of the year.
After several days of negotiations, the emergency takeover was finally approved with the participation of financial authorities from Switzerland, the US, and the UK.
Banking Crisis Contagion
The announcement made by CS, which stated that it found “material weaknesses” in 2021 and Financial Report 2022 Kab procedure, is the spark that causes chaos.
Even so, Credit Suisse has begun to lose the confidence of investors earlier this week.
Following the disclosure by the lender of flaws found in the reporting process that will be used for 2021 and 2022, Credit Suisse’s most important shareholder, the Saudi National Bank, stated that it will not buy additional shares from the Swiss bank.
The subsequent failures of Silvergate Bank, Silicon Valley Bank and Signature Bank fueled widespread fear among investors and concerns about Credit Suisse.
This is due to the fact that Signature Failure and SVB are signals that have difficulty spreading to banks of very large sizes. Credit Suisse is one of the largest financial institutions in the world.
Crypto total market cap rising a bit at $1.14 trillion on the daily chart at TradingView.com
Failed SVB and Signature put your attention on Credit Suissebut the issues of the three financial institutions are not related in any way.
Will Buyout Benefit Crypto?
As the banking sector experiences yet another harrowing event, cryptocurrency supporters and enthusiasts are taking to social media to express their happiness and victory.
Macro background for $BTC has never been more perfect
– The Fed should reduce the aggressiveness of rate hikes with the economic slowdown & turmoil in the global financial system
– Equity is not attractive due to slow sales & high PE
– Bonds offer mediocre yields & R/R profiles
– Fiat is increasing… https://t.co/8MHPLrAJEw pic.twitter.com/g0sd52UzDD— Andrew Kang (@Rewkang) March 15, 2023
With the ongoing bank failures in the US, caused by a combination of irresponsible fractional reserve banking, the Fed’s unpredictable rate fluctuations and poor risk management, the erosion of public trust in our banking system has reached new heights.
– Misha Lederman (@mishalederman) March 15, 2023
At the time of writing, Bitcoin is trading at $27,979.23, up 26.7% in the last seven days.
-Featured image from Business Today