Markets are reacting with nervousness to the acquisition of Credit Suisse by UBS.
FTAdviser looks at the latest developments, and what this means for your clients. The team will update this breaking story as the situation unfolds.
April 4
Final AGM
The chairperson of Credit Suisse, Axel Lehmann, has apologised to Credit Suisse’s shareholders
In the company’s last annual general meeting yesterday (April 4), Axel Lehmann said it was a “sad day”.
“Until the end, we fought hard to find a solution, but ultimately there were only two options: deal or bankruptcy,” he said.
Lehmann told attendees in Zurich that the company put all its energy and efforts into turning the situation around and putting the bank on track, but did not have time to do so and its plans were eventually “disrupted”.
“For that I am truly sorry.
“I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you.”
The meeting was the final AGM for the company before it is taken over by UBS, a deal arranged in haste by Swiss authorities to prevent further contagion in the banking sector after the collapse of Silicon Valley Bank led to falls in banks' share price.
March 30
Shuffling CEOs
UBS has appointed a former chief executive back into the role as it prepares for the merger with Credit Suisse.
Sergio Ermotti, who was chief executive of the swiss bank between 2011 to 2020, before becoming chairperson of Swiss Re, will take over from Ralph Hamers
UBS's shares rose on the news, and on Thursday (March 30) had risen 3.4 per cent.
March 23
Drawing stumps
The investment team at Candriam believe that the longer-term consequence of the Credit Suisse collapse could be that commercial banks tighten their lending conditions in order to preserve capital.
This might have the result that financial tightening happens at a pace faster than central banks are tightening interest rates, meaning that the impact of tighter monetary policy is amplified in the real economy and making it more likely equities fall in value.
March 21
Rates of change
One outcome of the financial market turbulence of recent days may be that central banks pause rate rises, and this would be expected to lead to a drop in mortgage rates, according to Matt Megens, who runs the fintech site HyperJar.
He said: "What has emerged from the chaos is the reduction in swap rates, a move that is set to be welcomed by borrowers. Swap rates, a market indicator used by banks and building societies to gauge future borrowing costs, began to climb before the crash of SVB. However, they have since fallen by 0.4 per cent which spells good news for those looking to fix in the near future. This will also have a knock-on effect on lenders, who are likely to release lower fixed-rate mortgages."
