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Tag: Financial Services

  • UBS buys Credit Suisse in rush deal

    UBS buys Credit Suisse in rush deal

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    FRANKFURT — Swiss banking giant UBS will buy the country’s second-largest bank Credit Suisse in a deal that will come as a relief to financial markets in Europe and across the world.

    UBS said in a statement that the total price is 3 billion Swiss francs, or about $3.25 billion, in UBS shares.

    The deal was pushed through in an effort to avoid further turmoil in global banking following the failure of Silicon Valley Bank and another regional lender in the U.S.

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the Swiss National Bank said in a separate statement, noting that the deal was made possible with the support of the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank.

    The central bank added that UBS and Credit Suisse can obtain a liquidity assistance loan of up to 100 billion francs.

    Highlighting the urgency of securing a deal for the bank before markets open on Monday, Swiss authorities adjusted laws to allow further provision of liquidity by the Swiss central bank, while the government agreed to provide additional guarantees.

    The expeditious rescue of Credit Suisse was welcomed by the European Central Bank as well as the Federal Reserve in the U.S.

    The “swift action” by the Swiss authorities “are instrumental for restoring orderly market conditions and ensuring financial stability,” ECB President Christine Lagarde said in a statement.

    The 167-year-old Credit Suisse has been involved in a series of scandals that have undermined the confidence of investors and clients. It has thus found itself in the eye of the storm when the collapse of Silicon Valley Bank sparked fears of a banking crisis.



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    ( With inputs from : www.politico.eu )

  • Silicon Valley Bank collapse sets off scramble in London to shield UK tech sector

    Silicon Valley Bank collapse sets off scramble in London to shield UK tech sector

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    LONDON — The U.K. government was scrambling on Sunday to limit the fallout for the British tech sector from the collapse of Silicon Valley Bank, a big U.S. lender to many startups and technology companies.

    The government is treating the potential reverberations as “a high priority” after a run on deposits drove California-based SVB into insolvency, marking the largest bank failure since the global financial crisis, U.K. Chancellor of the Exchequer Jeremy Hunt said in a statement Sunday morning. U.S. Treasury Secretary Janet Yellen and other policymakers were on alert that problems at SVB could spread.

    Hunt said the British government is working on a plan to backstop the cashflow needs of companies affected by SVB’s implosion and the halt in trading of its British unit, Silicon Valley Bank UK. The Bank of England announced on Friday that the U.K. unit is set to enter insolvency.

    Silicon Valley Bank’s “failure could have a significant impact on the liquidity of the tech ecosystem,” Hunt said.

    The government is working “to avoid or minimize damage to some of our most promising companies in the U.K.,” the chancellor said. “We will bring forward immediate plans to ensure the short-term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met.” 

    Hunt told the BBC Sunday morning that the government would have a plan that deals with the operational cashflow needs of companies “in the next few days.”

    Discussions between the governor of the Bank of England, the prime minister and the chancellor were taking place over the weekend, according to the statement.

    Speaking on Sky News Sunday morning, Hunt said that Bank of England Governor Andrew Bailey had made it clear that there was “no systemic risk to our financial system.” But Hunt warned that there was a “serious risk” to the technology and life-sciences sectors in the U.K. 

    Ministers held talks with the tech industry on Saturday after tech executives in an open letter warned Hunt that the SVB collapse posed an “existential threat” to the U.K. tech sector. They called for government intervention.

    Britain’s science and technology minister on Saturday pledged to do “everything we can” to limit the repercussions on U.K. tech companies.

    Michelle Donelan, who heads the newly created Department for Science, Innovation and Technology, said in a tweet: “We recognize that the tech sector is often not cashflow positive as they grow and I am determined to stand with them as we do everything we can to minimize impact on the sector.”

    GettyImages 1244845072
    Chancellor Jeremy Hunt said protecting the U.K. sector from the impacts of SVB’s collapse was a “high priority” | Justin Tallis/AFP via Getty Images

    A bank insolvency procedure for Silicon Valley Bank UK would mean eligible depositors would be paid the protected limit of £85,000, or up to £170,000 for joint accounts. 

    The Bank of England said in its Friday statement that SVB UK “has a limited presence in the U.K. and no critical functions supporting the financial system.”



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    ( With inputs from : www.politico.eu )