Merging UBS and CS doesn’t make sense

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The global banking earthquake also shook the Swiss financial center. First of all, the shares of the crisis-stricken big bank Credit Suisse have once again come under heavy pressure – most of all major European banks. The question arises, how to proceed with CS? Over the weekend, the possibility of a merger with UBS came up if the bank had a really serious problem, that is, a problem not only with costs and earnings, but also with liquidity.

However, the merger scenario is not respected among banking experts. Economist and financial market expert Klaus Wellershoff (59) rhetorically asks, “Who does this really help?” he asks. Probably no, that should be the answer. Unless CS’s problems turn out to be bigger than previously known. But even in this case a merger with UBS is not absolutely necessary, according to Wellershoff: “With the rule too big to fail, big banks can easily be split into individual institutes. CS Switzerland can easily survive on its own.”

very little competition

Economist Adriel Jost (37) sees this in a similar way: “UBS and CS will likely be forced to merge by the authorities, and UBS will have to get the fillets from CS virtually for free.” And the problem areas of CS are transferred to some kind of bad bank with the help of the state and national bank. But even then, a giant banking system would emerge in Switzerland from which no one could profit.

“The merged, cloned big bank will become a semi-official state bank on which the Swiss economy will depend for better or worse,” Jost notes. “The normally very slow competition between banks in Switzerland will slow down again.” This does not benefit anyone, neither the customers nor the financial center.

Source :Blick