The news: Swiss banking giant UBS has agreed to acquire failing competitor Credit Suisse, per CNN. Separately, in the US, Flagstar Bank, a subsidiary of New York Community Bank, agreed to buy Signature Bank’s assets.
A 167-year reign comes ends: After an emergency lifeline from the Swiss central bank failed to pull the bank out of its woes, Credit Suisse agreed to be acquired by UBS for roughly CHF 3.2 billion ($3.35 billion).
Concentration in Switzerland: Together, the banks hold assets equal to nearly 140% of the heavily-finance-dependent Swiss GDP, which makes concentration risk a major threat.
Assets, but not the digital kind: In the US, Flagstar bank has agreed to purchase defunct Signature Bank’s assets for $2.7 billion.
The bottom line: Financial regulators around the world hoped the buyouts would quiet the storm that’s raged in the banking sector over the past week and a half—but the stock markets are still howling. If anything, Credit Suisse’s move to wipe out bond holders and pay out stockholders—the exact opposite of how investors are supposed to be paid out—may have stoked greater fears. Meanwhile, the FDIC’s move to ban Signature Bank’s buyer from dealing in digital assets is a low blow to the already disoriented US crypto sector.
The US’s and Switzerland’s differing approaches to “bailouts” is forcing central banks around the world to outline how they’d plan to deal with similar banking crises, should one occur. But as we enter the second week of banking turmoil, the government and other more stable banks are failing to restore order.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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