Too big for Switzerland? Credit Suisse rescue creates bank twice the size of the economy
The last-minute rescue of Credit Suisse may have prevented the current banking crisis from exploding, but it’s a raw deal for Switzerland.
Worries that Credit Suisse’s downfall would spark a broader banking meltdown left Swiss regulators with few good options. A tie-up with its larger rival, UBS (UBS), offered the best chance of restoring stability in the banking sector globally and in Switzerland, and protecting the Swiss economy in the near term.
But it leaves Switzerland exposed to a single massive financial institution, even as there is still huge uncertainty over how successful the mega merger will prove to be.
“One of the most established facts in academic research is that bank mergers hardly ever work,” said Arturo Bris, a professor of finance at Swiss business school IMD.
https://www.msn.com/en-us/money/savingandinvesting/too-big-for-switzerland-credit-suisse-rescue-creates-bank-twice-the-size-of-the-economy/ar-AA18YNLk