UBS seeks $6 billion from Swiss government to acquire struggling Credit Suisse

Over the weekend, authorities were working tirelessly to rescue Credit Suisse as UBS expressed its interest in acquiring the struggling bank. According to sources familiar with the negotiations, UBS is seeking a $6 billion bailout from the Swiss government to aid in the acquisition of Credit Suisse.

The situation arises as Credit Suisse, a 167-year-old bank, experiences a crisis of confidence, making it the most globally significant bank to be affected by the turmoil following the recent collapse of Silicon Valley Bank and Signature Bank.

Regulators are pushing for a resolution before markets reopen on Monday, but sources warn that significant obstacles may delay the deal. If the two banks combine, up to 10,000 jobs may have to be cut. UBS is seeking guarantees that would cover the expenses of winding down certain parts of Credit Suisse and potential litigation fees.

The intense negotiations come after a tumultuous week for banking stocks and the efforts in Europe and the United States to stabilize the sector. The US government moved to backstop consumer deposits while the Swiss central bank lent billions to Credit Suisse to strengthen its shaky balance sheet. 

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Under pressure from Swiss authorities to take over its local rival to get the crisis under control, UBS may spin off Credit Suisse's Swiss business as part of the acquisition plan.

According to the Financial Times, Switzerland is said to be making preparations to utilize emergency measures in order to expedite the deal. 

Meanwhile, US and Swiss authorities are working together to broker a deal, and the British finance minister and Governor of the Bank of England are keeping a close eye on the situation.

Despite the efforts to rescue Credit Suisse, the fate of the bank remains uncertain. The next few days will be crucial in determining whether the acquisition plan is successful and if Credit Suisse can regain the confidence of its clients and investors.

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