Here, first, is what the Swiss financial authorities got right. They recognised that outsiders’ confidence in Credit Suisse was shot. They saw that the flight of depositors, which was reported to have reached €10bn (£8.7bn) a day last week, would get worse. They knew that only a full takeover, as opposed to complicated financial surgery, could withstand another onslaught by markets.
That being so, the buyer had to be UBS, a credible institution whose management could be told to think of its patriotic duty and do the deal over a weekend. And the terms, at face value, look generous to UBS, so the risk of creating a bigger banking whirlpool is lessened. The danger is not eliminated but plenty of grown-up banking voices judged that the acquirer is getting a bargain (a better one, for example, than the non-bargain that was Lloyds TSB’s rescue of Halifax Bank of Scotland in 2008).
