UBS to Buy Credit Suisse for $3.24B in Govt-brokered Deal

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The Facts

  • On Sunday, UBS, Switzerland's largest bank, agreed to buy Credit Suisse for approximately $3.24B ($3B Swiss francs) in a deal that contains $108B ($100B Swiss francs) in liquidity assistance from the Swiss central bank.

  • The takeover price is approximately 60% less than what the bank was worth when the market closed last Friday. Credit Suisse shareholders will receive the equivalent of 0.76 Swiss francs ($0.82) for UBS stock, replacing the shares in Credit Suisse that were worth 1.86 Swiss francs before the weekend.

The Spin

Pro-establishment narrative

There have been much bigger banking collapses in the past and the move by UBS and the Swiss government is part of a typical financial pattern. Banking is a business of confidence and deals as these must occur for such confidence to remain in the global markets. The primary objective is to keep the depositors safe, which is exactly what central bankers are doing right now.

Establishment-critical narrative

With a bank such as Credit Suisse to be bailed out in a manner horribly reminiscent of 2008, it is time for a radical rethinking of central bank policy. Such crises are the product of the central banks' policies and failure to supervise. Bankers cannot continue to attempt to serve both society and themselves — they must make the right decision or the markets are at risk of falling off a cliff.

Metaculus Prediction

Establishment split



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