James Sym, head of equities at London-based investment manager River and Mercantile, told CNBC that the market was in "seek and destroy mode." Smead also said investors could expect higher returns on assets from the new UBS-Credit Suisse entity, along with more consolidation in the European banking sector.īut bigger questions remain over the potential market impact of the deal. "Poor stock markets have caused investment banks to be the laggards, but commercial banks look good next to them," he said via email, naming JPMorgan and Bank of America as stocks he particularly likes. "money center" banks, a view echoed by Smead Capital Management's CEO Cole Smead, who said interest rate rises from central banks help lenders "that don't do stupid things in their assets." Goldman also reiterated its favorable view on U.S. regional banks to larger money center banks, a trend we expect will persist," the Wall Street giant's credit strategists said. But as we discussed on Friday, we take comfort from the limited contagion from U.S. "Of course, we are mindful that the situation among U.S. bank has shifted back to an overweight allocation on European banks as a result. Goldman Sachs said in a note late Sunday that the deal and associated liquidity and loss guarantees provided "clarity" and dampened tail risks. Shares of both UBS and Credit Suisse plunged on Monday morning, however. The government will offer a loss guarantee of up to 9 billion Swiss francs, with UBS assuming the first 5 billion of potential losses.
The deal also includes support from the Swiss government, financial regulator FINMA, and the Swiss National Bank (SNB), which will offer a liquidity line of up to 100 billion Swiss francs, backed by a federal default guarantee.
The cut-price deal is expected to close this year and creates a banking behemoth with more than $5 trillion in total invested assets. "We are happy to have found a solution, which I'm convinced will bring lasting stability and security for clients, staff, financial markets and to Switzerland." "The accelerating loss of confidence and the escalation over the last few days have made it clear that Credit Suisse can no longer exist in its current form," Lehmann said. The announcement of a loan of up to 50 billion Swiss francs from the Swiss National Bank failed to soothe investor concerns and eventually necessitated the 167-year-old institution's "emergency rescue" by UBS.Ĭredit Suisse Chairman Axel Lehmann told a press conference Sunday that the "latest developments that emanated from the banks in the U.S. Personal Loans for 670 Credit Score or LowerĪfter years of heavy losses and costly scandals, Credit Suisse's most recent share price plunge began with the collapse of U.S.-based Silicon Valley Bank and Signature Bank and was compounded when top investor the Saudi National Bank said it could not provide any more financial assistance.
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