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EU approves UBS deal to take over Credit Suisse

Photo of two protesters symbolically clearing Credit Suisse sign
© Keystone / Michael Buholzer

The European Commission has approved without conditions Swiss bank UBS's takeover of rival Credit Suisse after regulators said the deal wouldn’t raise any significant competition issues.

The EU cleared the merger deal on Thursday after a one-month review of the effects on the European Economic Area (EEA), concluding that UBS and Credit Suisse “are both global multinational investment banks” and their activities “overlap in wealth and asset management as well as in investment banking”.

+ What it takes to fuse two Swiss banking giants

The investigation in the EEA revealed that the combined entity will continue to face significant competitive pressure from other financial institutions. However, Switzerland is not a member of the EEA, so it would have been hard for the EU to oppose the deal. EU clearance of the transaction was widely expected, given the risks posed to the financial markets, said Bloomberg.

The EU Commission had already granted the two banks a derogation from the usual rules, which would have prevented them from implementing the merging process before the approval of the Commission. This allowed UBS to go ahead and obtain a pre-agreement from some regulatory authorities, such as the Swiss Financial Market Supervisory Authority, the Swiss National Bank and the Swiss Federal Department of Finance.

+ Credit Suisse bosses ‘enriched themselves with massive bonuses’

The only regulator which has not yet approved the merger deal is the US Securities and Exchange Commission (SEC), which is still in discussions.

After the collapse of Credit Suisse last March, the Swiss bank agreed to a CHF3 billion takeover by rival UBS in a deal supported by the Swiss government. Finance Minister Karin Keller-Sutter argued that the collapse of the ‘too big to fail’ bank would have caused “irreparable economic turmoil” in Switzerland and around the world.

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