- UBS Seeks $6 Billion Government Backstop As It Rushes To Finalize Credit Suisse Takeover
by Tyler Durden, https://www.zerohedge.com/
Update (17:45ET): As negotiations drag on late on Saturday night local time, Bloomberg reports that liabilities at the Credit Suisse investment bank are proving to be a key sticking point in the takeover talks (“UBS is worried about the balance sheet risk associated with the investment bank, which has suffered a string of losses and scandals in recent years”), with Reuters adding that UBS is asking the Swiss government to cover about $6 billion in costs if it were to buy Credit Suisse. The $6 billion in guarantees “would cover the cost of winding down parts of Credit Suisse and potential litigation charges.”
There are other snags: one sources cautioned that the talks to resolve the crisis of confidence in Credit Suisse are encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combine.
Meanwhile, with UBS facing pressure from the Swiss authorities to carry out a takeover of its local rival as soon as possible to get the crisis under control, the FT reported that Switzerland is preparing to use emergency measures to fast-track the deal, the Financial Times reported, citing two people familiar with the situation.