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European bank shares slumped, with an index of leading lenders (.SX7P) down 5.8%. Credit Suisse shares slumped 62%, reflecting the huge loss its shareholders will see in their investment in the bank. Monetary authorities in Singapore and Hong Kong, where Credit Suisse hosts large regional offices, separately said the Swiss bank's business continued without interruption. And Credit Suisse urged its staff to go to work, according to a memo to staff seen by Reuters. Credit Suisse staff arriving to work in Hong Kong and Singapore on Monday morning, however, fretted about retrenchments and retaining business.

Reuters Graphics Reuters GraphicsThe Swiss Bank Employees Association, in a statement to Reuters, demanded that UBS keep job cuts to an "absolute minimum". The statement underscores the sense of unease in Switzerland, with its reputation as a global financial center on the line. Green Party lawmaker Gerhard Andrey said that Credit Suisse is "such a visible institute". "A few months ago, nobody would have thought that Credit Suisse would fail. "But also that we are upholding the reputation of the Swiss financial centre."

☆ Investors dump Credit Suisse stock and bonds after UBS rescue
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +2 min

LONDON/ZURICH, March 20 (Reuters) - Investors dumped Credit Suisse (CSGN.S) shares and bonds on Monday after rival UBS (UBSG.S) agreed at the weekend to take over the 167-year old bank for just a fraction of its market value, with hefty backstops from the Swiss government. The debt is being written down on the orders of the Swiss regulator as part of its rescue merger with UBS, it was announced on Sunday, which angered bondholders. In a package orchestrated by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for Credit Suisse and assume up to $5.4 billion in losses. At Friday's close, Credit Suisse had a total market value of $8 billion. Shares in UBS meanwhile, dropped nearly 5% in premarket trading to around 15.81 francs.

☆ UBS CEO says bank can handle risks of Credit Suisse takeover
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +1 min

ZURICH, March 20 (Reuters) - UBS (UBSG.S) can handle the risks from taking over Swiss rival bank Credit Suisse (CSGN.S), UBS Chief Executive Ralph Hamers told broadcaster SRF. In a package orchestrated by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses. "The second step for us is to transform CS's investment bank into an investment bank like UBS has. He said he did not currently have any figures regarding lay-offs at Credit Suisse, although there would always be cost savings. The intended takeover would bring security and stability to the Swiss financial market and also for Credit Suisse clients, he added.

SHANGHAI/HONG KONG, March 20 (Reuters) - Credit Suisse told staff its wealth assets are operationally separate from UBS for now, but once they merged clients might want to consider moving some assets to another bank if concentration was a concern, according to an internal memo. The memo dated Sunday, seen by Reuters, gave talking points to Credit Suisse (CSGN.S) staff for client conversations after a historic Swiss-backed acquisition of the troubled bank by UBS Group (UBSG.S). In a package orchestrated by Swiss regulators on Sunday, UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses. Credit Suisse also told staff to inform clients that plans for its investment banking business will be communicated in due course as details of its acquisition by UBS were still being worked out, according to an internal memo. We are fully focused on ensuring a smooth transition and seamless experience for our valued clients and customers," a Credit Suisse spokesperson said.

The European Central Bank vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" in restoring calm. There are also concerns about what happens next at Credit Suisse and what that means for investors and employees. The Swiss central bank said Sunday's deal includes 100 billion Swiss francs ($108 billion) in liquidity assistance for UBS and Credit Suisse. Credit Suisse shares had lost a quarter of their value last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined confidence.

☆ The $17 billion wipeout of Credit Suisse bondholders has not gone down well in Europe
▼ + stars: | 2023-03-20 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +1 min

Credit Suisse's additional tier one bonds are set to be wiped out following the struggling bank's takeover by UBS. One section of Credit Suisse's bondholders is set to be wiped out following the struggling bank's takeover by UBS, causing them to see investments worth 16 billion Swiss Francs ($17 billion) become worthless. The move has angered Credit Suisse AT1 bond holders as their investments have seemingly been lost, while shareholders will receive payouts as part of the takeover. Therefore, the decision "can be interpreted as an effective subordination of AT1 bondholders to shareholders," Goldman Sachs' credit strategists said in a research note published Sunday. "It also represents the largest loss ever inflicted to AT1 investors since the birth of the asset class post-global financial crisis," they added.

☆ Asia's regulators say banking system is robust and stable after UBS-Credit Suisse takeover deal
▼ + stars: | 2023-03-20 | by ( Sumathi Bala | ) www.cnbc.com time to read: +3 min

Last week, Credit Suisse logged their worst weekly decline since the onset of the coronavirus pandemic. Hong Kong says industry is resilientThe Hong Kong Monetary Authority said the city's banking sector is resilient with strong capital and liquidity positions. "The total assets of Credit Suisse, Hong Kong Branch amounted to about HK$100 billion, representing less than 0.5% of the total assets of the Hong Kong banking sector. Credit Suisse customers will continue to have full access to their accounts and "contracts with counterparties remain in force. Japan banks 'shielded'As for Japan, the country's banking system is unlikely to be affected by the deal, said Cyrus Daruwala, managing director of IDC Financial Services.

☆ Stocks making the biggest moves premarket: First Republic, UBS, Enphase Energy
▼ + stars: | 2023-03-20 | by ( Pia Singh | ) www.cnbc.com time to read: +2 min

First Republic — The bank tumbled about 19% premarket after Standard & Poor's cut its credit rating again, to B+ from BB+, on Sunday. S&P first lowered First Republic's credit rating to junk status last week. UBS , Credit Suisse — Shares of UBS fell about 5% before the U.S. open, while Credit Suisse shares plunged 58%. Some analysts said UBS's forced Credit Suisse merger over the weekend could boost investor sentiment toward U.S. regionals. Zions Bancorp.

LONDON, March 20 (Reuters) - European bank bonds slumped on Monday following the state-backed rescue of Credit Suisse (CSGN.S) by UBS (UBSG.S) as a wipeout of some bondholders raised concerns around broader bank capital and also hammered bank shares. "The takeover of Credit Suisse by UBS was done fast and should have provided reassurance to the market that we haven’t had another bank collapse. However, what it has done is exposed the issues around AT1 bonds,” said Russ Mould, investment director at AJ Bell. In the bond market, Credit Suisse's Additional Tier 1 (AT1) bonds were bid as low as 1 cent on the dollar on Monday as investors braced for the wipeout. Shares in Credit Suisse (CSGN.S) fell as much as 64.5% while UBS Group (UBSG.S) shares dropped as much as 16%.

☆ Bitcoin market gains $26 billion after hitting 9-month high as banking crisis sparks rally
▼ + stars: | 2023-03-20 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +3 min

ET Monday, the value of all the bitcoin in circulation gained around $26 billion. Bitcoin jumped on Monday as some investors turned to digital currencies amid a crisis in the traditional banking sector. The rally in bitcoin comes amid turmoil in the global banking sector which was sparked by the collapse of Silicon Valley Bank in the U.S. On Sunday, UBS agreed to buy Credit Suisse for 3 billion Swiss francs ($3.2 billion) in a deal partly brokered by the Swiss regulators looking to stem contagion across the global banking sector. Other cryptocurrencies are not seen as "digital gold" by proponents in the same way that bitcoin is.

☆ European stocks slide as Credit Suisse buyout fails to soothe investors
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +1 min

The pan-European STOXX 600 index (.STOXX) fell 0.8% by 0807 GMT, after having recorded its biggest weekly decline of the year on Friday. Shares of Credit Suisse slumped 62.3% after rival UBS Group AG said it will pay 3 billion Swiss francs ($3.23 billion) for the 167-year-old bank and assume up to $5.4 billion in losses, in a package orchestrated by Swiss regulators on Sunday. Investors were also spooked by news that Credit Suisse additional tier-1 bonds - or AT1 bonds - with a notional value of $17 billion will be valued at zero, angering some of the holders of the debt who thought they would be better protected than shareholders. The wider European banking index (.SX7P) slid 3.2% to hit its lowest level in three months. Reporting by Sruthi Shankar in Bengaluru; Editing by Sherry Jacob-PhillipsOur Standards: The Thomson Reuters Trust Principles.

☆ 'Shotgun wedding': What the UBS rescue of Credit Suisse means for global markets
▼ + stars: | 2023-03-20 | by ( Elliot Smith | ) www.cnbc.com time to read: +6 min

Axel Lehmann, chairman of Credit Suisse Group AG, left, and Colm Kelleher, chairman of UBS Group AG, during a news conference in Bern, Switzerland, on Sunday, March 19, 2023. "The accelerating loss of confidence and the escalation over the last few days have made it clear that Credit Suisse can no longer exist in its current form," Lehmann said. In equal parts "shotgun wedding" and arranged marriage, UBS agreed to buy stricken domestic rival Credit Suisse for 3 billion Swiss francs ($3.25 billion) on Sunday. The government will offer a loss guarantee of up to 9 billion Swiss francs, with UBS assuming the first 5 billion of potential losses. Shares of both UBS and Credit Suisse plunged on Monday morning, however.

☆ Explainer: Why markets are in uproar over a risky bank bond known as AT1
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +4 min

Here are some of the implications of the Credit Suisse AT1 bond write-down. WHAT IS AN AT1 BOND? Credit Suisse AT1 holders, therefore, are the only ones not to receive any kind of compensation. It is not the first time that the treatment of AT1 bonds in a bank overhaul has caused controversy. The decision to write down Credit Suisse AT1 bonds to zero is viewed as negative for the AT1 bond market globally.

☆ European supervisors say shares should be wiped out before bonds
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, March 20 (Reuters) - European supervisors tried to stop a rout in the market for convertible bank bonds on Monday, saying owners of this type of debt would only suffer losses after shareholders have been wiped out - unlike what happened at Credit Suisse (CSGN.S). The European Banking Authority, European Central Bank and the Single Resolution Board and were reacting to a decisions by Swiss authorities to write off Credit Suisse's Additional Tier 1 bonds even as stockholders received shares in UBS (UBSG.S). The three European regulators - respectively responsible for writing the rules, applying them and winding down failing banks - said they would continue to impose losses on shareholders before bondholders. "Additional Tier 1 is and will remain an important component of the capital structure of European banks," they added. The supervisors welcomed, however, "the comprehensive set of actions taken yesterday by the Swiss authorities" to save Credit Suisse.

☆ First Republic shares slide 18% Monday after a credit rating downgrade
▼ + stars: | 2023-03-20 | by ( John Melloy | ) www.cnbc.com time to read: +2 min

A trader works at the post where First Republic Bank stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, March 16, 2023. S&P cut its credit rating to B+ from BB+ on Sunday after first lowering it to junk status just last week. Shares of First Republic Bank , which have become the barometer of the regional bank crisis, slid once again Monday after Standard & Poor's cut the credit rating of the San Francisco-based institution. On Thursday, a group of major banks agreed to deposit $30 billion in First Republic to shore up confidence in regional banks. Credit Suisse executives noted that the U.S. regional bank crisis caused enough instability that forced the already shaky institution to merge with its rival.

☆ Goldman says the Fed will not hike rates this week because of banking system stress
▼ + stars: | 2023-03-20 | by ( John Melloy | ) www.cnbc.com time to read: +2 min

Goldman Sachs said the Federal Reserve won't hike interest rates on Wednesday as most of Wall Street expects because of the emerging banking crisis. "We expect the FOMC to pause at its March meeting this week because of stress in the banking system," Goldman economists wrote in a note Monday. As of Friday, most economists expected the Fed to hike by a quarter percentage point this week, not wanting to delay its inflation fight despite the upheaval in the financial sector. The Fed's current target range is 4.5% to 4.75% following a quarter percentage point increase last month before the banking stress came to light. After this pause, Goldman expects the Fed to resume hiking at its next meeting in May by a quarter percentage point and tack on two more quarter-point increases in June and July.

One recruiter told Insider they'd seen an influx of resumès of a similar scale to the 2008 financial crisis. Executives looked 'very downbeat' at an all-company meetingHeadquartered in Zurich, Credit Suisse has a large presence in Europe. A European-based headhunter told Insider they'd "heard there were some tears" from Credit Suisse veterans about the prospect of the bank's takeover. As Credit Suisse's outflows accelerated over recent months, it appears its employees have hunted for other postings. One industry headhunter in the UK said their desk has piled up with job applications from Credit Suisse workers for around a month.

☆ How bad is the banking crisis?
▼ + stars: | 2023-03-20 | by ( Spriha Srivastava | ) www.businessinsider.com time to read: +7 min

The Fed along with five other central banks announced coordinated action to reassure global banks. To make sense of those acronyms, GFC refers to the global financial crisis of 2007 to 2009, EZ crisis is the Eurozone crisis of 2009 onwards, temper tantrum likely refers to the taper tantrum of 2013, and the Covid 3/20 shock is when global markets went haywire in the early stages of the pandemic. So, you might be wondering: Just how bad is the banking crisis? "It means the banking crisis we've seen over the past few weeks has started a new chapter rather than reaching its ending." After the 2008 financial crisis, the Bank of International Settlements (BIS) made it necessary for all European banks to issue CoCo bonds.

☆ European banks battered after Credit Suisse rescue
▼ + stars: | 2023-03-20 | by ( Lucy Raitano | ) www.reuters.com time to read: +3 min

LONDON, March 20 (Reuters) - Shares in European banks were battered in early trade on Monday following UBS's (UBSG.S) state-backed rescue of Credit Suisse (CSGN.S) that brought with it massive writedowns for the latter's bondholders. Shares in Credit Suisse (CSGN.S) fell more than 63% while UBS Group (UBSG.S) shares were last down 12.5%. UBS on Sunday agreed to pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses. JPMorgan said that although UBS stood to gain in the longer-term from the deal, the writedown of the AT1 bonds would impact other European banks. Barclays cut its view on European banks to "neutral" from "positive" on Monday, citing likely increased regulatory scrutiny after Silicon Valley Bank collapse and UBS agreeing to buy Credit Suisse.

The ECB vowed to support euro zone banks with loans if needed, adding the Swiss rescue of Credit Suisse was "instrumental" for restoring calm. [1/6] Chairman of the Board of Directors of UBS, Colm Kelleher and Chairman of the Board of Directors of Credit Suisse, Axel Lehmann attend a news conference on Credit Suisse after UBS takeover offer, in Bern, Switzerland, March 19, 2023. The Swiss central bank said Sunday's deal includes 100 billion Swiss francs ($108 billion) in liquidity assistance for UBS and Credit Suisse. Credit Suisse shareholders will receive 1 UBS share for every 22.48 Credit Suisse shares held, equivalent to 0.76 Swiss francs per share for a total consideration of 3 billion francs, UBS said. Under the deal with UBS, some Credit Suisse bondholders are major losers.

FINMA, the Swiss regulator, said the decision would bolster the bank's capital. Engineered in the wake of the global financial crisis, AT1 bonds are a form of junior debt that counts towards banks' regulatory capital. "It's stunning and hard to understand how they can reverse the hierarchy between AT1 holders and shareholders," said Jerome Legras, head of research at Axiom Alternative Investments, an investor in Credit Suisse's AT1 debt. Credit Suisse's AT1 debt had rallied earlier on Sunday amid reports that shareholders would receive something in a deal with UBS, raising hopes that bondholders would be protected. The move by the Swiss regulator could make it harder for other lenders to raise new AT1 debt, investors said.

Under the deal being discussed, UBS would only keep parts of Credit Suisse’s investment bank that fill gaps either geographically or in certain product areas where UBS lacks a presence. UBS Group AG has offered to buy rival Credit Suisse for around $1 billion in a deal engineered by Swiss regulators to restore trust in the banking system, according to people familiar with the matter. One option would involve buying the entirety of Credit Suisse and then spinning off its local Swiss operations into an independent entity, the people said. UBS would keep Credit Suisse’s valuable wealth-management business.

☆ Exclusive: Swiss authorities mull imposing losses on Credit Suisse bondholders
▼ + stars: | 2023-03-19 | by ( John O'Donnell | ) www.reuters.com time to read: +2 min

FRANKFURT, March 19 (Reuters) - Swiss authorities are examining imposing losses on Credit Suisse (CSGN.S) bondholders as part of a rescue of the bank, two sources with knowledge of the matter said on Sunday. Losses on bondholders could need to be larger if Credit Suisse were wound down rather than if it were taken over by UBS, one of the sources said. Authorities are trying to engineer a UBS takeover of Credit Suisse before financial markets reopen on Monday. Credit Suisse and UBS declined to comment. Credit Suisse bonds plunged into distressed territory at or below 30 cents on the dollar this week as investors worried about the health of the bank even after the Swiss National Bank provided the lender with a $54 billion emergency loan.

FRANKFURT/LONDON, March 19 (Reuters) - Swiss authorities are examining imposing losses on Credit Suisse (CSGN.S) bondholders as part of a rescue of the bank, two sources with knowledge of the matter said on Sunday. Losses on bondholders may need to be larger if Credit Suisse were wound down rather than if it were taken over by UBS, one of the sources said. Authorities are trying to engineer a UBS takeover of Credit Suisse before financial markets reopen on Monday. A $1 billion deal would mean Credit Suisse shareholders getting a fraction of what their shares were worth on Friday. "I would be surprised if Credit Suisse bondholders, including AT1 investors, weren’t made whole.

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