© Reuters. FILE PHOTO: The national flag of Switzerland flies above a logo of Swiss bank Credit Suisse outside a branch in Bern, Switzerland November 29, 2022. REUTERS/Arnd Wiegmann//File Photo
By John O’Donnell
FRANKFURT (Reuters) – Swiss authorities are considering imposing losses on Credit Suisse bondholders as part of a bailout of the bank, two sources with knowledge of the matter said on Sunday.
However, European regulators fear such a move lest it damage investor confidence elsewhere in the European financial sector, the sources said, speaking on condition of anonymity.
A final decision had not yet been taken and the terms could still evolve, according to the sources.
Losses on bondholders may have to be greater if Credit Suisse is liquidated rather than taken over by UBS, one of the sources said. Authorities are trying to engineer a UBS takeover of Credit Suisse before financial markets reopen on Monday.
FINMA, the Swiss regulator, did not immediately respond to a request for comment. Credit Suisse and UBS declined to comment.