UBS seeks US$6 billion in government guarantees for Credit Suisse takeover

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Credit Suisse is the biggest name ensnared in the turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week

The US$6 billion in government guarantees UBS is seeking would cover the cost of winding down parts of Credit Suisse and potential litigation charges, sources said

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A sign of Credit Suisse bank is seen behind a sign of Swiss banking giant UBS in Zurich on Saturday. Photo: AFP

Reuters

Published: 7:35am, 19 Mar 2023Updated: 7:36am, 19 Mar 2023

UBS AG is asking the Swiss government to cover about US$6 billion in costs if it were to buy Credit Suisse, a person with knowledge of the talks said, as the two sides raced to hammer together a deal to restore confidence in the ailing Swiss bank.

The 167-year-old Credit Suisse is the biggest name ensnared in the turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week, spurring a rout in banking stocks and prompting authorities to rush out extraordinary measures to keep banks afloat.

The US$6 billion in government guarantees UBS is seeking would cover the cost of winding down parts of Credit Suisse and potential litigation charges, two people told Reuters.

Warren Buffett, chairman, CEO and largest shareholder of Berkshire Hathaway. Photo: Reuters

One of the sources cautioned that the talks to resolve the crisis of confidence in Credit Suisse are encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combine.