© Reuters. Logos of Swiss banks UBS and Credit Suisse are seen in Zurich, Switzerland March 19, 2023. REUTERS/Moritz Hager
LONDON (Reuters) – The Bank of England welcomed moves by the Swiss authorities to broker a take-over by UBS of Credit Suisse on Sunday, indicating it would support approval of the deal, and it said the British banking system was well funded.
UBS agreed to buy rival Swiss bank Credit Suisse for 3 billion Swiss francs ($3.23 billion) in stock and assume up to 5 billion francs ($5.4 billion) in losses in a merger engineered by Swiss authorities.
“We welcome the comprehensive set of actions set out by the Swiss authorities today in order to support financial stability,” the BoE said in a statement, adding it would support international counterparts in implementing the actions.
“The UK banking system is well capitalised and funded, and remains safe and sound.”
London is a major financial centre and both Swiss banks have units based in Britain which are regulated by the Financial Conduct Authority (FCA) and the BoE’s Prudential Regulation Authority (PRA).
The FCA said it was “minded to approve the actions announced today in relation to the entities which fall under its regulatory and supervisory remit.”
The BoE’s statement coincided with similar ones from the European Central Bank and the U.S. Federal Reserve, as well as a statement from Britain’s finance ministry.
“The UK government welcomes the steps taken today by the Swiss authorities in relation to Credit Suisse to support financial stability, and will continue to engage with the FCA and the Bank of England as is usual,” a finance ministry spokesperson said.
British officials have sought to reassure investors about the health of the broader banking system since the collapse of U.S. lender Silicon Valley Bank earlier this month.
($1 = 0.9280 Swiss francs)