MAS Says Credit Suisse Operations In Singapore Will Not Be Interrupted
Following reports that UBS Group will buy up troubled bank Credit Suisse, the Monetary Authority of Singapore (MAS) has stated that operations in Singapore will continue operating as usual.
Source: Reuters
Furthermore, customers will still have full access to their accounts.
The UBS deal is also not expected to affect the stability of Singapore’s banking system adversely.
On top of that, Credit Suisse’s contracts with counterparties will remain in force, the statement added.
MAS to be in close contact with CS, UBS, and Swiss authorities for transition
In a statement released today (20 Mar), MAS revealed it had been briefed on UBS’s takeover of Credit Suisse by the Swiss Financial Market Supervisory Authority (FINMA).
Source: Central Banking
As the Swiss government body responsible for financial regulations, FINMA announced yesterday (19 Mar) that it had approved UBS’s acquisition of Credit Suisse.
It also stated that the Swiss National Bank (SNB) and Swiss Confederation would give Credit Suisse liquidity assistance.
Credit Suisse and UBS’s activities in Singapore primarily involve private banking and investment banking in Singapore. However, this does not extend to retail customers.
Credit Suisse also conducts financial services under other licensed entities in Singapore.
As such, MAS will be in close contact with FINMA, UBS, and Credit Suisse during the takeover. This is to ensure an orderly transition and address “any impact on employment”.
Just last year in October, The Straits Times reported that Credit Suisse would be cutting 9,000 jobs worldwide, which included Singapore.
UBS bought up Credit Suisse for S$4.34 billion
Reuters reported that Swiss authorities had facilitated a deal for the nation’s biggest bank, UBS, to buy up Credit Suisse.
Things had been looking bleak for Credit Suisse since last Wednesday (15 Mar), when it lost nearly 25% of its market value.
At the time, Saudi National Bank said it would not buy more shares.
In other words, it meant Credit Suisse’s largest investor could no longer provide further support.
This prompted investors and customers — who were already on edge from the collapse of Silicon Valley Bank and Signature Bank — to withdraw S$14.4 billion (CHF 10 billion) in funds.
US Authorities Shut Down Two Banks In One Week, Combined Assets Amounted To S$428 Billion
As one of the 30 global systematically important banks, Credit Suisse’s failure would have a ripple effect on the global financial system.
Apart from engineering the takeover, Swiss authorities are also providing S$144 billion (CHF 100 billion) in liquidity assistance for Credit Suisse and UBS.
Besides that, the government is providing a loss guarantee of a maximum of S$13 billion (CHF 9 billion) for UBS. This is because the latter will assume up to S$7.2 billion (CHF 5 billion) in losses.
Have news you must share? Get in touch with us via email at news@mustsharenews.com.
Featured image adapted from Credit Suisse.
