Bailout for Swiss Bank, Markets React

Bailout for Swiss Bank, Markets React


European markets have seen a mixed reaction to the announcement of a bailout by UBS and the Swiss National Bank for the beleaguered Swiss bank Credit Suisse.


In talks over the weekend, a bailout of 3 billion francs, or 3.4 billion euros, was agreed for Credit Suisse. The deal comes shortly before the New Zealand, Australia and Eastern European business shares launch on Monday. A country like Switzerland, known for its safe banking system and financial hub, is an unusual case of this kind. The financial crisis at Swiss bank Credit Suisse has also raised questions about Switzerland’s financial system.


Shares in Credit Suisse were down 61.9% before the market opened in Zurich on Monday morning. After this deal, the shares of the bailout UBS Bank also recorded a decrease of eight percent. Swiss authorities had asked UBS to take over its smaller rival, Bank Credit Suisse. Earlier, the financial crisis of two banks in the US raised fears that smaller banks could go bankrupt internationally.


Credit Suisse is one of the top thirty financial institutions, which are considered to be major banks internationally. Officials were concerned that the bank’s failure could have an impact on the global financial system. In this context, Swiss President Alain Birse said in his statement on Sunday night that the uncontrollable collapse of Credit Suisse may cause extraordinary negative effects on the country and the international financial system.

It should be noted that in 2008, due to the bankruptcy of some American financial institutions, the global financial crisis was created, the effects of which can be seen on financial institutions till now.

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