UBS Completes Credit Suisse Takeover To Create Swiss Bank Titan (bloomberg.com) 43
UBS Group completed the deal to acquire former rival Credit Suisse Group, sealing the biggest merger in banking since the 2008 financial crisis and creating a global wealth-management titan. From a report: The Swiss bank announced the closing of the deal in an open letter in local and international newspapers on Monday. The takeover of Credit Suisse ends the lender's 167-year independent existence. The announcement caps more than two months of uncertainty for employees after UBS finalized negotiations with the Swiss government over a 9 billion Swiss franc ($10 billion) guarantee against potential losses on Credit Suisse assets. The deal sets UBS up for a windfall gain in the tens of billions of dollars and begins a period of complex integration likely to involve thousands of job cuts.
WAY too big to fail (Score:5, Informative)
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Are the Swiss focused on domestic divestiture or global? Globally it isn't *that* big, but I imagine it has a big domestic impact.
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That's the point, we'd really like the domestic banking being split from the international and especially investment ones.
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Well, if you take the list from 2022 https://en.wikipedia.org/wiki/... [wikipedia.org], then the UBS + CS combo is somewhere around number 10 of the largest banks on the planet. Does not seem like "not that big" to me. Of course CS is not worth much these days, but it is unclear how that will develop. UBS alone was place 34 in 2022, and around 1/3 in assets of the largest US bank. Again hardly a case of "not that big".
Re:WAY too big to fail (Score:4, Interesting)
According to them they manage now 3.4 Billion USD. That puts them pretty much near the top of that list.
You also have to realize, that we have only a population of 8.5 Million people. This bank we couldn't save, should it fail, tearing down the entire economy with it.
Plus trust is nearly 0 in UBS after the 2008 fiasco.
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That much? That is even more than my slap-dash estimate. So, yes pretty much. Incidentally, I am one of those 8.5 million. I do think the Swiss economy would survive, but this would have pretty bad international effects and may trigger a much larger crisis. On the plus side, Ermotti is not incompetent, unlike the CS leadership (and board) has been for the last 10 years or so. So there is hope.
Re: WAY too big to fail (Score:1)
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Also, considering Credit Suisse's reputation, the world really doesn't need an even bigger fraudster corporation.
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Considering that CS has a much worst rep then UBS (and presumably same for managment), I hope they don't do a Boeing and end up with CS managment in charge of the combined UBS later.........
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Yeah, free market and its competition is over (Score:1)
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2008 European banking crisis.
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and into "we could dictate government policy" territory.
As an American, I share your reservations. UBS is significantly bigger than the biggest US bank, and did not have a reputation for being better at risk management than CS. Are the Gnomes of Switzerland and the Gnomes of the Federal Reserve going to force US taxpayers to bail it out if it gets into trouble?
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Like computers, banks are mainly busy with elementary operations, like adding bonuses, subtracting jobs, multiplying profits and dividing them among shareholders.
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Because a company this big in the banking industry is stuff that not only matters, but something that directly will affect you regardless of how far removed you are from it.
Swiss Bank Titan (Score:1)
I hope it plays well with the other Titans [wikipedia.org].
Re:The most corrupt financial institution (Score:4, Informative)
I realize US education is lacking. But if you consult a thing called a "map" you will see that Switzerland is very much in Europe, not even somewhere on the outer borders. What Switzerland is not is in the EU.
Re: The most corrupt financial institution (Score:1)
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To to mention, if you consult a thing called "history", you'll see that the worst US banks aren't in Europe specifically but all over the world. HSBC anyone? It's literally a safe haven for financial fraud. How about SVB or WaMU? Those reckless US banks invested in totally unsound products and collapsed like the pieces of shit banks they were.
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In a discussion about who did what in banking history it is usually wise not to try to out-asshole the Swiss, as you will lose every time.
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Indeed. But the story was about UBS and CS which are pretty much in Switzerland. At least the main offices. Also, what killed CS was mismanagement, not corruption or fraud. It did play a role, but the main problem was CS desiring to be much more important than it was and really crappy CEO and board member choices over a decade or longer.
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Imagine you're the CEO. You get offered one of two compensation packages to run a big bank. In the first case, you get paid 1 1/2 times the annual salary of a teller at one of your bank's branches. You get paid this as long as you do your job and the bank continues to operate, whether you make a trillion dollars net profit for the bank's owners through your leadership, or a thousand. Either way, your pay is the same. How much effort will you put in? How innovative will the bank you run be? The other option is you get your base salary, (let's say... the same as above,) plus 10% of whatever profits the bank makes. Directly into your pocket. If your bank racks up a trillion dollars in profits, you're a centi-billionaire. You're gonna work harder and more creatively than if you just get a striaght salary, aren't you. It's not even a question, hence that question's lack of a question mark.
So on the one hand I can run a safe stable bank and get 'not much money' for doing it.
Or I can risk my entire bank and chase after those megabucks. (destroying my countries economy in the process if I fail)
Heads I win, tails we all lose. What CEO is not going to do risky things to take that bet with other peoples money?
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I realize US education is lacking..... What Switzerland is not is in the EU.
Oh! not SWAZILAND! Silly Yankee missed that in geometry class.
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Apparently spelling education is not good either. No surprise.
Got Gold? (Score:2)
UBS, not USB (Score:2)
When I first read the headline, I thought it was talking about the connector.
Reddit (Score:2)
Will there be a flood of reddit users here today and tomorrow, I wonder?
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Wow, you may be the first 2 digit Slashdot ID I've seen for the past two decades...
Oh, and the answer to your idle(?) question is "today".
UBS does not want this headache. (Score:2)
But Swiss regulators force this shotgun wedding on them.
Running Out of Large Banks (Score:2)
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We're running out of large banks to buy out the slightly smaller banking titans when they fail. We all know what happens once the largest of the titans fall and I haven't heard a single person in government offer a suggestion on how to handle that situation when it eventually happens.
You haven't heard of countries nationalizing banks before?