Credit Suisse is being purchased by UBS

UBS, Switzerland’s largest bank, has agreed to purchase its ailing rival Credit Suisse in an emergency rescue deal aimed at calming financial market panic caused by the failure of two American banks earlier this month.

UBS is paying 3.25 billion Swiss francs for Credit Suisse, which is roughly 60% less than the bank’s value as of Friday’s market close. Credit Suisse shareholders will be largely wiped out, receiving only 0.76 Swiss francs in UBS shares in exchange for stock worth 1.86 Swiss francs on Friday. Owners of $17 billion in «additional tier one» bonds, a riskier type of bank debt, will lose everything, according to Swiss regulators.

The deal will not require shareholder approval after the Swiss government agreed to change the law to remove any uncertainty about the transaction.

For years, Credit Suisse had been losing the trust of investors and customers. It suffered its worst loss since the global financial crisis in 2022. However, confidence fell last week after it admitted to «material weaknesses» in its bookkeeping and as the failures of Silicon Valley Bank and Signature Bank spread fear about weaker institutions at a time when rising interest rates have eroded the value of some financial assets.