Banks all over the world are facing pressure from the spreading crisis in the US banking sector. Some of them show remarkable resilience, while others go bankrupt. The contagion has already reached Europe where the second-largest Swiss bank collapsed overnight. This is a worrisome sign for everyone. When Swiss banks renowned for their stability are in trouble, financial markets might have to brace for something worse. In March this year, UBS, Switzerland's largest bank, agreed to buy its smaller rival Credit Suisse. Notably, one of the biggest takeover deals was approved in a matter of days. It seemed that ailing Credit Suisse had no other choice but to accept the deal. However, according to some reports, the groundwork for this merger had been laid for years. It has been revealed that UBS was planning to acquire its competitor at least three years before its collapse. When Colm Kelleher took over as UBS chairman a year ago, he inherited feasibility studies left by his predecessor Axel Weber dating back to at least 2020. They contained a detailed description of the Credit Suisse takeover. Reportedly, Kelleher called on a group of top advisors from Morgan Stanley to plan the merger. According to Bloomberg, the plan was top secret and no one at Morgan Stanley's US division knew what their colleagues were working on in Switzerland. When the banking crisis broke out in the US and spread to Europe, UBS management was prepared for this scenario. When Credit Suisse’s stock tumbled to an all-time low on March 15, UBS quickly moved to action. The bank invited Morgan Stanley advisers and JPMorgan Chase bankers who then flew to Zurich and signed confidentiality agreements. As a result, Saudi National Bank, Credit Suisse’s biggest shareholder, lost over $1 billion in investments following the bank’s collapse. As of late 2022, the Riyadh-based bank was holding 1.4 billion Swiss francs with Credit Suisse.
