As of today, 16.03.2023 09h31, please use this megathread for all related content on the CS current crisis.

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* [En français (RTS)](https://www.rts.ch/info/economie/13871213-ubs-rachete-credit-suisse-pour-3-milliards-de-francs-objectif-retablir-la-confiance.html)
* [In italiano (RSI)](https://www.rsi.ch/news/svizzera/UBS-CS-un-colosso-da-5%E2%80%99000-miliardi-di-dollari-in-patrimoni-16106125.html)
* [Auf Deutsch (SRF)](https://www.srf.ch/news/wirtschaft/krise-bei-der-credit-suisse-ubs-uebernimmt-die-cs-boersen-starten-in-neue-handelswoche)

Link to the biweekly talk: [https://old.reddit.com/r/Switzerland/comments/11grueo/biweekly\_talk\_questions\_thread/](https://old.reddit.com/r/Switzerland/comments/11grueo/biweekly_talk_questions_thread/)

46 comments

  2. And there it is, UBS wants billions from the tax payer for this.

    End result will be a bank that is even more “too big to fail” than before.

    What a joke.

  4. Oh even the employees are withdrawing their cash. The bank is de facto bankrupt, uninsurable on the CDS market, I am not sure what a merger would bring to UBS.

  5. > Wie Medien berichteten, haben internationale Zentralbanken den Schweizer Akteuren im Übernahme-Plan – also der SNB, der Finma und den beiden Grossbanken – massiv gedroht. Die internationalen Zentralbanken würden ihren Banken in den entsprechenden Ländern namentlich verbieten, mit der Credit Suisse weiter Geschäfte zu tätigen, sollte die Rettung der angeschlagenen Bank nicht gelingen.

    History repeats itself. Seemingly the only times Switzerland acts resolutely is under massive foreign pressure.

  7. Holy shit man…

    > Die UBS Group AG soll laut einem Bericht der «Financial Times» angeboten haben, die Credit Suisse für bis zu einer Milliarde Dollar zu kaufen. Dabei plane die Regierung, die Gesetze dahingehend anzupassen, damit eine Abstimmung der Aktionäre über die Transaktion umgangen werden kann.

    and

    > Zwar stehe noch in den Sternen, was die Causa CS den Bund kosten könnte, sagt SRF-Wirtschaftsredaktor Reto Lipp in der SRF-Sondersendung. Bei Reuters sei aber derzeit die Rede von umgerechnet rund 5.5 Milliarden Franken

    Casino Capitalism.

  9. any thoughts how UBS buying CS will affect bank accounts in either?

    dont mean like the “hiding oligarch money” accts

    but like “taking out cash from a UBS cashpoint to buy brezel at Denner” accts

  10. Dudes on here and in other places online (tagesanzeiger etc.) a week ago: “It’s not a bailout, just a loan! Everything is fine.”

    > Bloomberg: Bund zieht Verstaatlichung der CS in Betracht
    Der Bund zieht die teilweise oder vollständige Verstaatlichung der Credit Suisse in Betracht als Alternative zur Übernahme durch die UBS. Dies berichtet Bloomberg unter Berufung auf informierte Kreise. Die Situation sei sehr volatil und könne sich weiter verändern, zitiert Bloomberg die Personen.

  11. They are considering nationalizing Credit suisse….. Socialize the risks and privatize the gains. Pisses me off so much, screw the banks, long live bitcoin.

  12. Yikes. Going to be something if Credit Suisse gets nationalized (partially or otherwise) and taxpayers end up footing the bill.

  14. With all these scandals and crisis I wonder about the downsides of the Zauberformel. For the major parties it’s great because no one can be held responsible if everyone is responsible. But it certainly invites an unhealthy form of nepotism across the various institutions of power (political, economical, elite) in my view.

  23. This press conference is fucking funny, many answers to questions about the size / future of the UBS are basically demonstrated to be absurd by the very actions now with CS.

    Also the nonchalance they show about the risk associated with the backstop and the change in the competitive landscape is pretty grating.

  24. KKS literally said “Es handelt sich nicht um eine Bankrettung” after a question about the 200 billions in liquidity + 9 billions in guarantee to the SNB. Roflmao.

  26. I’m watching Bloomberg right now, from El-Erian to others, all of the guests featured and the hosts say that this is a bail out.

  28. Guys! You are all missing the point! The question everyone should be asking is. Can account holders with CS withdraw money? Is there a limit, if so, what is the limit?

    Please if anyone knows reply to me.

  29. So who will be our second major financial institution after this? Or is Swiss relevance in banking (not just private banking but retail and investment) coming to an end?

    Or will “newBS” come out as one of the real big ones? Seems like we have all our eggs in one basket there

  30. I still blame the Arab dude for setting this all off with his poorly thought through public comments…

  31. This isn’t that bad. I sold 1.50 puts. Figured it would be way worse for me. 3.2 bill is way better than 1 or 2 billion.

  35. anyone knows what will happen to my funds & bonds I have in my PostFinance ‚Vermögensverwaltung‘ from CS? I read bonds will be worthless so I am worried

    Credit Suisse Index Fund – Equity EMU
    CH0185703607

    Credit Suisse Index Fund – Equity Switzerland Total Market
    CH0348228609

    Credit Suisse Index Fund – Bond Switzerland AAA-BBB
    CH0482006191

  37. To all fellow CS stock owners: how do you feel about what just happened? I‘m torn between „they saved us from total loss“ and „WTF shareholder expropriation ruled by the federal council without legal basis and not right to vote“. Basically they made a huge present to UBS right? At the cost of investors and tax payers?

  38. Is there some kind of ELI5 on how this all started? I get the situation now but I fail to see what the origin of CS‘s crisis is.

  40. Screw every Stoopid banker in this thread …this is absolute madness, UBS -15% in 1 hour and then they will say “sorry gov can I haz monyy plz” who’s going to bail UBS ? F that

  41. So we had two “too big to fail” banks and now that one is failing, we merge them into one “super-duper too big to fail” bank?

  42. The state guarantees certain losses up to 9b. UBS pays less than half of the market value as of Friday. Further, 16b in bonds are wiped.

    IMO, the state guarantees a nice present to UBS. We could have taken over CS as a nation and would have had the chance for a turnaround and profit as trust was the issue and nationalization would have provided trust.

    As a nation, we could use two big banks. Now we get one huge bank and if they fuck up, we’re kinda deep in.

    It’s a solution, but I think there were better options.

  43. oh lord how delusional some people are and whining on 20min that they lost money by having CS shares and were not able to decide what’s going to happen.

    First of all if you invest in a shit company that was destined to fail you deserve to lose that money. And secondly this was the best outcome for the share price. What else did they think was going to happen? Let the bank be liquidated?

    And these people are angry at the bank for mismanagement? But still decided to invest in that bank? And then go show their face on 20min? I really wish people would think twice what they are supporting when they “invest”.

  44. ELI5 how would this affect an average swiss resident ? Rising cost of living / Sfr inflation / job market etc…?

  46. So, interestingly, as an economist and financial banking auditor, the more I think and read about how this went, the smarter the Swiss institutions appear to have dealt with the situation and prepared for it.

    Apparently only in Switzerland had the FINMA included the possibility to write off AT1 debt without necessarily calling on the equity first.

    >”FINMA would follow the order of priority set out under Swiss banking laws, which means, among other things, that the Notes would have to be converted prior to the conversion of any of CSG’s subordinated debt that does not qualify as regulatory capital with a contractual write-down or conversion feature. Furthermore, **in the case of any such cancellation**, ***FINMA may not be required to follow any order of priority*****, which means, among other things, that t*****he Notes could be cancelled in whole or in part prior to the cancellation of any or all of CSG’s equity capital*****.**”

    The reasons that could provide the Finma a reason to act are also explicit

    >A “Viability Event” will occur if either… or (ii) customary measures to improve CSG’s capital adequacy being at the time inadequate or unfeasible, **CSG receives an irrevocable commitment of extraordinary support from the public sector** (beyond customary transactions and arrangements in the ordinary course) that has, or imminently will have, the effect of improving CSG’s capital adequacy **and without which, in the determination of FINMA, CSG would have become insolvent, bankrupt, unable to pay a material part of its debts as they fall due or** ***unable to carry on its business***.

    International investors who hadn’t read the specifics in the prospectuses of the bonds may have been caught by surprise, but indeed the Finma had no obligation to touch first the equity before writing off the bonds.

    What this means is that UBS is getting for 3bn a bank that had 45bn in equity, which has now increased by 17bn overnight. They are going to add a massive goodwill in their balance sheet, providing a very good cushion against potential losses from CS integration and, therefore, providing as well a cushion before the maximum 9bn in guarantees from the confederation is requested, a guarantee that was necessary to provide the reason to write off the AT1s, as the liquidity line provided by the SNB might not be considered sufficiently extraordinary in a court since all banks have credit lines with the central bank, albeit for far smaller limits.

    Now comes the even smarter part. So why get into this mess about bonds and throwing the international investor community into chaos, re-pricing all of a sudden their CoCo’s. Why not wiping out equity **as well**. Well, the Swiss government in conjunction with FINMA and the SNB clearly had thought of this possibility in the past when they included those provisions into FINMA’s circulars.

    Wiping out entirely the equity would entail declaring the bank insolvent or bankrupt. For legal matters, this would have started a massive chain of reaction of pure chaos around the world à la Lehman Brothers, even if the bank had been rescued immediately. Instead, the swiss government has kept the façade of this event being a simple sale of a bank to another bank with some government encouragement. No bankruptcy, no insolvency, no nothing, a mere transaction between two companies that have decided to merge by means of an exchange of equity.

    Avoiding this fate for Credit Suisse would have been preferable, but given how quick things were moving and how little progress CS had done since the negative speculation started in the 2nd half of 2022, this quick solution appears to be quite reasonable and palatable for everyone. Except for those bondholders, but I won’t cry for them, not only because it’s their damn fault for not reading what their getting into despite the fact that only professional investors can buy CoCos, but also because they knew of the risk and got their due reward in the form of 10% interest rates paid on their debt from CS.

    Kudos to FINMA and the SNB.

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