OUR UBS Group became Switzerland’s only bank with a global reach after its smaller competitor was bailed out by government intervention. Credit Suisse – and this is considered a risky bet as it makes the Swiss economy more dependent on a single banking institution.

The unprecedented move, announced late Sunday in Zurich, curtailed the race against time that regulators were in to avoid a meltdown in global markets on Monday. Switzerland is pledging more than 160 billion francs ($173 billion) in loans and guarantees to support the new group, protecting it from any further risks it may face. The deal, the first bailout for a global bank since the 2008 financial crisis, gives UBS huge leverage by ridding it of a major domestic competitor.

This means the landscape will change banks in Switzerland, where Credit Suisse and UBS branches are scattered all over the place, sometimes only a few meters apart. The two financial groups have been the pillars of the global financial system for decades. They are among the most important systemic banks in the global financial sector and own up to 140% of Switzerland’s GDP in total assets.

Meanwhile, after the financial crash of 2008, politicians vowed never to bail out banks again. The rescue of Credit Suisse, which was carried out with public funds, shows the continued vulnerability of banks and how quickly their problems can arise. In addition, the development eliminates a Wall Street competitor, and UBS plans to replace much of the investment bank Credit Suisse. “Under normal circumstances, I’d say this is an absolutely fantastic deal for UBS,” said Johan Scholz, Morningstar’s European bank equity analyst. “In today’s environment, it’s a bit more difficult as there’s a lot of uncertainty in the markets in general.”

Immediately after the announcement, central banks, including the US Federal Reserve, the European Central Bank and the Bank of Japan, said they would tighten their dollar swap lines, allaying fears of unrest in the banking sector as a whole. The collapse of two US banks and the fall of Credit Suisse stock sent shockwaves through the markets last week.

UBS will pay $3.2 billion for 167-year-old Credit Suisse and suffer at least $5.4 billion in losses from the liquidation of its portfolio of derivatives and other risky assets. Holders of Credit Suisse’s additional Tier 1 bonds will be marginalized and, controversially, second only to equity holders who will receive at least a portion of UBS shares.

The bank in question has finally emerged as the undisputed world leader in wealth management for the wealthy, while its leading position in China is now backed by the strength of Credit Suisse in the rest of Asia, the fastest growing market.