What would happen if Credit Suisse goes bust?

Well, in reality, they knew what risk they are taking, so, who cares? :wink:

You are doing a multiplicative comparison that has no meaning. Perhaps you are conditioned by the idea of 0 being a lower bound.
Depending on what is in their 531 Billion CHF assets, perhaps one will discover that there is a further 10 Billion hole on the asset side (the next Greensill / Archegos / …). In that case the value would be -9 Billion after the deal with UBS.
Then you have the costs related to the acquisition.
Probably it is a very bad deal for UBS to take over CS “as is”.


Why would UBS maintain a legacy CS fund that competes against their own funds which charge higher fees?


UBS has their own zero TER institutional fund offerings. E.g. the finpension vested benefits foundation offers them as alternative to CSIF and Swisscanto. If UBS takes over CS Asset Management, I would expect equivalent funds to get merged at some point. Small / less profitable CS funds without an equivalent UBS fund might get closed down.

Also, these zero TER mutual funds still have fees (unlike e.g. Fidelity zero fee funds). The fees are simply negotiated with institutional clients and paid in cash instead of taken out of the fund.


I don’t know what will happen but with less competition in the market place (quasi duopoly becomes quasi monopoly) it doesn’t bode well for fees


I’m also concerned about reduced competition. However, with regards to institutional index funds, at least Swisscanto exists as well.

With regards to retail banking, I would hope that the CS Swiss Bank won’t stay at UBS (WEKO might insist on that as well).


I mean, I wouldn’t feel particularly bad for them. Just wondering about the geopolitical consequences if the Swiss government changes the law such that the shareholders can no longer vote on the transaction. Not sure if the Saudi government, which holds 80% of Saudi National Bank’s shares, would just say “Our bad, that was a risky bet, let’s write the money off.”


They would get UBS shares so for them it’s not a write off (what a bust would’ve done to their capital).
Or am I wrong?

Yes but the UBS shares would be worth less than 20% compared to Friday’s valuation of their CS shares, so a significant loss. If they’d go bust, they also would not lose everything. After all assets are liquidated and all debt holders are paid off, shareholders would get the remaining proceeds. So they might get more than 20% if they go bust.

Looks like they will get 25 cts in UBS shares per CS share so roughly 8 times less at Friday close values.

UBS: “Hold my beer while I’ll tell you my offer price!” :clown_face:


offer/deal at ~2b now

They notably don’t offer them in their 3a products.

CS is a much bigger player in services and funds for pension/retirement funds in Switzerland (as far as so know - though I also heard or read someone confirm that on either NZZ or SRF). And I suppose that most of the invested money in such funds is quite “inert”.

Closing down such funds could, I suppose, “activate” these institutional investors and make them reevaluate their position - with the risk that they move to Swisscanto altogether.

When it comes to serving pension funds, I assume it could make more sense to “reversely” fold UBS’ existing business into CS (while changing brand anyway, of course).

I’ve been thinking about you and your sentence all day, but well, it’s still too early to say “I told you so”. :rofl: :beers:

Edit: I told you :man_shrugging:t2::grin:

Deal is done. 2 billion by UBS.

Live at 19:00.

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I guess that concludes the thread.

What would happen if Credit Suisse goes bust?

Answer: It would be force-fed to UBS.



… plus 100 billion liquidity by SNB guaranteed lol.

The moral of the story is that only one bank in Switzerland is “too big to fail” if even the federal council sides with it by offering liquidity.

I have the impression that UBS is a kind of retail bank for the SNB and the Federal Council.

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This is a bit sad, especially for the employees who will probably have their contracts terminated… 9,000 new unemployed?