Swiss Sweat Over Size Of New Superbank
Mohammad Ali (@ChaudhryMAli88) Published March 22, 2023 | 07:53 PM
The arranged marriage of UBS and Credit Suisse will create the biggest bank Switzerland has ever seen, with some wondering if the superbank might be too big for its own good
Zurich, (UrduPoint / Pakistan Point News - 22nd Mar, 2023 ):The arranged marriage of UBS and Credit Suisse will create the biggest bank Switzerland has ever seen, with some wondering if the superbank might be too big for its own good.
The deal struck late Sunday prevented the collapse of the country's second-biggest lender by folding it into the largest.
Even before last week's dramatic events, both firms were already among the 30 around the world deemed of strategic importance to the global banking system and therefore too big to fail.
Some in business, industry and politics are not convinced that one even bigger bank will turn out for the better.
"Credit Suisse was really the bank of the economy and industry," said Philippe Cordonier of Swissmem, the national association representing the engineering industry.
For exporting companies, Credit Suisse offered a range of services essential for international transactions, "payments abroad, credits, leasing or currency hedging", he told AFP.
"This is where the question arises of what skills will be kept," said Cordonier, as the profiles of the two banks, although close, are not identical.
So far, many questions remain unanswered.
Such a takeover would normally need months of negotiations, but UBS only had a couple of days, under some serious arm-twisting by Swiss authorities.
UBS chief executive Ralph Hamers admitted at an analysts' conference that he did not yet have all the details of the takeover.
Switzerland is a confederation of 26 cantons and Cordonier said the alternative could be to turn from the national banks to the cantonal banks.
The other option is to turn to foreign banks, although they would not possess "in-depth knowledge" of the Swiss market, Cordonier said.
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