Paul J. Davies, Columnist

Curing Credit Suisse Should Contain the Chaos

As the government-preferred buyer, UBS had a strong hand and drove a very hard deal.

March 19, 2023 at 10:12 PM UTC

Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. Previously, he was a reporter for the Wall Street Journal and the Financial Times.

Colm Kelleher, chairman of UBS Group AG, left, Karin Keller-Sutter, Switzerland's finance minister, center, and Alain Berset, Switzerland's president
Photographer: Pascal Mora/Bloomberg

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Once the world knows a bank is in government-led talks about a rescue deal, then it’s a deal that has to be done. Credit Suisse Group AG could not afford to go into the opening of Asian markets with its own national authorities having questioned its viability.

The Swiss government said it had to act after heavy deposit outflows late last week. The Swiss National Bank’s $54 billion liquidity support handed to Credit Suisse on Wednesday didn’t restore faith. Opening on Monday without a solution in place would have very likely meant a death spiral for Credit Suisse and mayhem for markets.