Thousands of City jobs will go amid race to save Swiss bank
THOUSANDS of jobs are expected to be lost in the City as regulators race to rescue one of the world’s biggest banks before markets open tomorrow.
The government of Switzerland was last night holding an extraordinary meeting to seal a shotgun takeover of troubled Credit Suisse by its Swiss rival UBS amid rising fears of a new international financial crisis.
Any deal is expected to result in thousands of job losses in London, where the two banks employ around 10,000 people between them at large offices in the City and Canary Wharf. The Bank of England and other international regulators have been holding discussions with the Swiss National Bank and regulator Finma about the terms of the rescue, which needs to be finalised within hours to avoid the risk of a market panic tomorrow. A sticking point was said to be the future of Credit Suisse’s troubled investment bank, which has a significant presence in London.
The Swiss government was preparing to use emergency powers to speed up the takeover, allowing it to skip a consultation period under which UBS would normally have to give shareholders six weeks to consult on the deal.
If agreement is reached, it will be the third intervention in a bank within days after a crisis that has caused severe disruption on both sides of the Atlantic. The turmoil, which has its roots in rising interest rates, began with the collapse of US lender Silicon Valley Bank, prompting an intervention by the federal government. Regulators also closed New York-based Signature Bank.
Meanwhile, US lenders injected $30billion (£25billion) into Californian bank First Republic on Thursday. This was not enough to stop another 33pc drop in its stock the following day.
The boards of Credit Suisse and UBS are locked in meetings as they attempt to finalise plans for the deal, with UBS demanding an indemnity against future legal costs and breathing space from regulators to shore up its financial position if an agreement is reached.
Swiss authorities are widely believed