​UBS is considering a possible takeover of troubled Credit Suisse on Saturday, sources said, which could ease fears that the current crisis could destabilize the global banking system.

Credit Suisse, 167 years old, is the most prominent bank caught up in the market turmoil caused by the collapse of US banks Silicon Valley Bank and Signature Bank in the past week, losing a quarter of its stock value since Monday. .

To contain the crisis, Swiss authorities have been pressuring UBS to take over rival bank Credit Suisse, two people familiar with the situation said.

Under the plan, the Swiss government would provide a guarantee against the related risks, and the Swiss unit of Credit Suisse could be spun off.

UBS, Credit Suisse and Switzerland’s financial regulator FINMA declined to comment.

Credit Suisse CFO Dixit Joshi and his teams met over the weekend to assess their options for the bank, people with knowledge of the matter said, and there were more reports of interest from rivals.

US financial giant BlackRock said it had no plans or interest in making a rival bid for Credit Suisse, while Bloomberg reported that Deutsche Bank was considering buying some of the bank’s assets.

Credit Suisse’s share price has fluctuated wildly this week as the bank was forced to seek $54 billion in emergency funding from the Swiss central bank.

Sentiment in Switzerland, long seen as a model of banking stability, was subdued as executives grappled with the future of the country’s biggest banks.

“Banks under permanent stress,” said the front page of the Neue Zuercher Zeitung on Saturday.

Credit Suisse is one of the world’s largest asset managers and is considered one of the 30 systemically important banks worldwide whose failure would cause turbulence throughout the financial system.

Five people with direct knowledge of the matter said at least four of Credit Suisse’s main rivals, including Societe Generale and Deutsche Bank, have placed restrictions on their transactions involving the Swiss bank or its securities, indicating a vulnerability .

Goldman Sachs has cut its guidance on European bank debt, saying a lack of clarity over the future of Credit Suisse is putting pressure on the broader sector in the region.

Sector fundamentals are stronger and global systemic connections are weaker than during the global financial crisis, Goldman analyst Lotfi Karui wrote in a note to clients. This trend significantly limits the risk of a potential vicious circle of counterparty credit losses, Karui noted.

“However, a stronger political response is probably needed to achieve some stability,” Karui said. (source: news.ro)