UBS to take over Credit Suisse, central banks act on liquidity

by ian

Financial turmoil in the U.S. continues to cause headaches abroad.

Over the weekend, UBS sealed a deal to buy rival Swiss bank Credit Suisse in an effort to avoid further turmoil in global banking.

UBS made the purchase on Sunday for a near equivalent of $3.23 billion dollars and assume up to $5.4 billion in losses.

Credit Suisse told staff its wealth assets are operationally separate from UBS for now, but once they merged clients might want to consider moving some assets to another bank if concentration was a concern.

Under the deal, around $17 billion dollars of Credit Suisse’s Additional Tier 1 debt will be written down to zero on the orders of the Swiss regulator.

Investors in UBS took a hit while concerns over the health of the global banking sector was reflected in declining banking stocks and bonds on Monday.

In additional news, the Federal Reserve said it had joined central banks in Canada, England, Japan, the EU and Switzerland in a coordinated action to enhance market liquidity.