/ 20 March 2023

A Swiss roll towards UBS

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We’re just a week into the banking crisis that has sent shockwaves across global markets, and we start this week with wheeling and dealing over troubled Swiss giant Credit Suisse. It’s in takeover talks with the nation’s largest bank UBS, and while these deals are complicated at the best of times, regulators from the US, Britain and Switzerland are all pouring over the details. And reports say UBS will ask the Swiss Government to cover about US$6 billion in restructuring and legal costs – but analysts say stabilising the system would be worth the price. So what’s this got to do with the collapse of California’s Silicon Valley Bank (SVB) and resulting jitters over other regional banks in the US? It’s all about the vibe… Credit Suisse has had plenty of problems recently, and while there was no direct trigger last week, SVB’s decline had investors take a second look. In this, the finance industry is a bit like disco dancing – it all falls apart when there’s a confidence void…

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