UBS announced its decision to buy the shares of the financially troubled Credit Suisse bank for $3.2 billion. According to the Associated Press report, the government negotiated the deal to avoid a potential banking crisis. The announcement comes hours after TRON boss Justin Sun submitted a bid to acquire the troubled bank.
UBS to buy Credit Suisse for $3.2 billion
Financial group UBS has made an extraordinary move by acquiring the distressed bank Credit Suisse, which had been going through financial hardships of unprecedented proportions.
According to the Apnews news agency, UBS Group agreed to pay an exorbitant $3.2 billion for the deal. The Credit Suisse bank had attempted to negotiate a loan from the Swiss Central Bank for 50 billion Swiss francs, an incredible $54 billion.
But this amount turned out to be a drop in the bucket compared to the magnitude of its difficulties. Against this critical backdrop, the Swiss Central Bank, in an effort to safeguard the national economy, sought the intervention of UBS and proposed this historic agreement.
On Sunday, March 19, Swiss President Alain Berset officially announced the alliance between the two banking giants.
Initially, this promising agreement was for a modest sum of one billion dollars. But UBS was forced to significantly increase its proposal during the day in the face of unrelenting government pressure, according to the Associated Press report.
Yet why would UBS venture into the murky waters of a sinking ship? Well, apart from the magic stick that spits out liquidity, i.e. the famous money printing machine, nothing could convince this Swiss banking group to invest in a bank in perdition.
So the Swiss National Bank also offered a staggering $162 billion to UBS to convince it to acquire the wreckage of Credit Suisse.
Justin Sun upsets UBS with a bid for Credit Suisse
Credit Suisse Bank has seen its stock value plummet at a rapid rate, forcing it to sell its shares in order to prevent a catastrophe. Initially, the UBS Group had offered to acquire the bank’s shares for $1 billion.
However, Justin Sun’s announcement seemed to upset the plans and the course of events. This Sunday, Tron founder Justin Sun put out a call via Twitter to buy Credit Suisse Bank for $1.5 billion, with the intention of transforming it into a web-based financial institution3.
Although it has not formally confirmed its bid, Sun has demonstrated its ambition by seeking to take over a bank and acquire its assets. This announcement has undoubtedly caused some concern within the UBS group and has prompted it to make a more attractive offer.
Currently, the traditional financial sector is in turmoil following the banking crisis that began with the failure of Silvergate Bank and Silicon Valley Bank, two of the largest banks in the United States. Academic studies have recently revealed that 186 U.S. banks are also vulnerable to this crisis.
There is no question that traditional banks are destined to collapse as the fractional reserve system becomes increasingly obsolete. That said, it is high time to roll up our sleeves and look for ways out of this impasse. Who knows, maybe we are about to return to the gold standard, or better yet, the Bitcoin standard!
Coming from a journalism university background, I came across Bitcoin and cryptocurrencies not long ago.
The potential of the Blockchain seduced me and I made it my research topic.