Credit Suisse deal halted crisis, Swiss national bank says
The Swiss central bank has hiked its key interest rate and insisted that a government-orchestrated takeover of troubled Credit Suisse by rival bank UBS ended the financial turmoil
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The Swiss central bank hiked its key interest rate Thursday and insisted that a government-orchestrated takeover of troubled Credit Suisse by rival bank UBS ended the financial turmoil.
In a statement, the Swiss National Bank said it's providing large amounts of support in Swiss francs and foreign currencies and that the Sunday announcement by the federal government, financial regulators and the central bank “put a halt to the crisis.”
The hastily arranged, $3.25 billion deal aimed to stem the turmoil in the global financial system after the collapse of two U.S. banks and jitters about long-running troubles at Credit Suisse led shares of Switzerland's second-largest bank to tank and customers to pull deposits.
Swiss authorities urged UBS to take over its smaller rival after the central bank's plan for Credit Suisse to borrow up to 50 billion francs ($54 billion) last week failed to reassure investors and customers.
To support the deal, the Swiss central bank says it's providing a loan of up to 100 billion francs and the government is providing another 100 billion francs of support as a backstop if needed.
“An insolvency of Credit Suisse would have had severe consequences for national and international financial stability and for the Swiss economy,” said Thomas Jordan, chairman of the Swiss central bank’s governing board.
The central bank hiked its key interest rate by half a percentage point to counter “renewed increase” in inflation, which rose since the beginning of the year, to 3.4% last month.
It follows a quarter-point rate hike by the U.S. Federal Reserve on Wednesday and expectations of a rise by the Bank of England on Thursday. The European Central Bank also hiked by a half-point last week, with the ECB and Fed chiefs looking to assure people that the financial system is stable.