© Reuters. Customers line up outside a branch of Silicon Valley Bank in Wellesley, Massachusetts, U.S., March 13, 2023. REUTERS/Brian Snyder
(Reuters) – UBS AG was considering a takeover of Credit Suisse on Saturday as the embattled lender faced a breakthrough weekend amid market turmoil sparked by the collapse of U.S. lenders Silicon Valley Bank and Signature Bank (NASDAQ:).
DEVELOPMENTS
* A takeover of Credit Suisse by UBS could see the Swiss government offer a guarantee against the risks involved, two people with knowledge of the matter said on Saturday.
* The two banks’ boards were due to meet separately over the weekend, with a source saying Swiss regulators are encouraging the pair to merge, but neither bank wants to.
* At least four major banks, including Societe Generale (OTC:) and German Bank (ETR:), restrict new transactions involving Credit Suisse or its securities, five sources told Reuters.
* US investment giant BlackRock (NYSE:) has denied a Financial Times report that it was in a competing bid for all or part of Credit Suisse.
* ECB Governing Council member Pierre Wunsch does not expect a repeat of the 2008 financial crisis despite the turmoil caused by the collapse of Silicon Valley Bank, saying European banks were subject to stricter rules than US regional banks.
* Goldman Sachs (NYSE:) lowered its recommendation on exposure to European bank debt from neutral to overweight, saying a lack of clarity on Credit Suisse’s future path would put pressure on the wider sector.
* SVB Financial Group has filed for a court-supervised reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets, days after regulators took over its former unit Silicon Valley Bank (SVB ).
* The U.S. Federal Deposit Insurance Corp (FDIC) is considering steps to facilitate takeovers of Signature Bank and Silicon Valley Bank, a source told Reuters.
* Moody’s (NYSE:) downgraded Bank of the First Republic (NYSE:) debt. Prior to the announcement, the bank’s shares plunged nearly 33%, capping an 80% wipeout in the past 10 sessions, despite a bailout with $30 billion in deposits pumped in by major US banks.
* US President Joe Biden has urged Congress to give banking regulators more power.
* A senior official at the People’s Bank of China said the SVB’s collapse showed how rapid changes in monetary policy had ripple effects, the state-run Shanghai Securities News reported.
MARKETS
* Investor sentiment remained fragile on Friday, leaving global stocks under pressure as gold prices posted their biggest one-week rally in three years. The dollar slid and Treasury yields fell.
* As worries about banks swirl, investors seek protection against a stock market crash