UBS Group emerged as Switzerland’s one and only global bank with a state-backed rescue of its smaller peer Credit Suisse, a risky bet that makes the Swiss economy more dependent on a single lender.
and the Bank of Japan said they would enhance dollar swap lines, helping calm investors rattled by turmoil in the banking sector. The failure of two U.S. banks and a rout in Credit Suisse shares have sent shock waves through markets over the past week.
It marks a radical twist of fate for the banks. During the great financial crash, it was UBS and not Credit Suisse that needed state support. "In the past, when a deal between Credit Suisse and UBS was discussed, a sticking point would be concentration, especially in the domestic market," said Morningstar’s Scholtz. "It is also the most stable part of the business, that generates quite a lot of cash. If UBS is not required to do an IPO of it, it could make sense for them to keep it, there are lots of synergies."
"This solution has risks," she conceded, playing down any concerns about the size of the new bank, arguing that any alternative to resolve Credit Suisse's problems risked "irreparable economic turmoil."
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