DAccording to insiders, the major Swiss bank UBS is demanding extensive state guarantees for the possible emergency takeover of Credit Suisse. It’s about $6 billion, a person familiar with the matter told Reuters on Saturday. Depending on the terms of the transaction, higher or lower amounts are also possible.
The guarantees would cover the cost of winding up parts of Credit Suisse and possible other previously unknown risks, two people said. A takeover is intended to resolve the crisis of confidence surrounding the crisis-ridden Credit Suisse.
The Swiss supervisory authorities are trying to find a solution for Credit Suisse before the market launch on Monday. But according to one of the insiders, the negotiations are going slowly. A number of points have not yet been clarified. Opinions differed as to what should happen to the Credit Suisse investment bank. Another stumbling block is the downsizing. There are around 10,000 jobs, most of which are likely to be for Credit Suisse employees. If everything goes smoothly, an agreement is possible by Sunday evening, it said. A possible alternative to the takeover by UBS is the entry of the Swiss state. Spokesmen for Credit Suisse, UBS and the Swiss Treasury declined to comment.
Deutsche Bank is also interested in acquiring parts of Credit Suisse, one of the people said. However, an agreement with the German money house could take longer. A spokesman for the German institute declined to comment. The agency “Bloomberg” had previously reported on an interest on the part of Deutsche Bank.
A potential deal will be complex, KBW analyst Thomas Hallett wrote in a note to clients on Saturday. This includes protection against legal disputes. “The situation remains in flux, but clarity must be achieved by Monday.”
