Swiss government announces support for Credit Suisse takeover by UBS

The Federal Council of the Swiss government said it welcomes the planned takeover of Credit Suisse (CS) by UBS (UBS). "To strengthen financial market stability until the takeover is complete, the federal government is providing a guarantee for additional liquidity assistance from the Swiss National Bank to Credit Suisse. This support is intended to secure the liquidity of Credit Suisse and thus also ensure the successful implementation of the takeover. The Federal Council is taking this measure in order to protect financial stability and the Swiss economy," the agency said in a statement. The Federal Council has created the necessary legal basis for the Swiss National Bank to be able to provide Credit Suisse with additional liquidity assistance. Specifically, the Federal Council has established bankruptcy privilege rights for this additional liquidity assistance. Second, to ensure that Credit Suisse is provided with sufficient liquidity at all times, the Federal Council has decided to give the SNB a default guarantee for liquidity assistance. In order to reduce any risks for UBS, the federal government is also granting UBS a guarantee in the amount of CHF 9B to assume potential losses arising from certain assets that UBS takes over as part of the transaction, should any future losses exceed a certain threshold. Reference Link