British banking watchdogs have given their blessing to a takeover of Credit Suisse by its Swiss peer UBS, as financial regulators around the world race to contain the industry’s biggest crisis since 2008.
Sky News understands that the Bank of England has indicated to international counterparts and to UBS that it will support the emergency transaction, which both European banking giants want to announce later on Sunday.
Credit Suisse has been brought to the brink of financial calamity despite securing a $54bn (£44bn) credit line from Switzerland’s central bank several days ago.
The move, which was designed to reassure markets and depositors, failed to halt a rush of customer withdrawals, prompting a request from the Swiss government for UBS to explore a takeover of its historic rival late last week.
Jeremy Hunt, the chancellor, and Andrew Bailey, the Bank of England governor, are being kept informed about developments relating to the most significant global banking merger since the financial meltdown of 15 years ago.
Although Credit Suisse has a market capitalisation of just $8bn (£6.6bn) – down from close to $100bn (£82bn) at its 2007 peak – fears for its future have sent shockwaves through financial markets across the world.
Its vast investment bank balance sheet is reported to represent a stumbling block in the talks with UBS, and the precise structure of a deal remained unclear on Sunday morning.
UBS’s board, chaired by the former Morgan Stanley executive Colm Kelleher, is said to have been reluctant to explore a deal with its fellow Swiss bank, which has been forced into a string of capital-raisings after huge fines and restructuring charges.
City sources said authorities in the US had pressed the Swiss government to expedite a solution to the crisis during the course of this weekend.
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Reports suggest that UBS wants the Swiss government to provide a multibillion dollar backstop to insure it against losses arising from the takeover of its smaller rival.
The current tumult in the global banking sector was sparked by the collapse of Silicon Valley Bank in the US earlier this month.
Its UK branch was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.
Hopes takeover will avert contagion
Nevertheless, there are hopes that a takeover of Credit Suisse will avert the kind of contagion that evokes genuine comparisons with the crisis of 2008, when banks including Bear Stearns and Lehman Brothers collapsed.
Credit Suisse employs approximately 5,000 people in the UK, making it one of the largest investment banking employers in the City.
The Bank of England declined to comment on Sunday, while Credit Suisse and UBS have been contacted for comment.
But what about his style ‘prince’? Some want that ditched too.
It’s a complicated but not impossible process. Andrew could, of course, just stop using it voluntarily.
Some want him to give up his home, too. For a non-working royal, the stately Royal Lodge, with its plum position on the Windsor Estate, is an uncomfortable optic.
With the reputation of the monarchy at risk, William does not want to appear weak. He’s putting loyalty to “the firm” firmly above his familial relationships.
Prince Andrew has always strongly denied the allegations, and restated on Friday: “I vigorously deny the accusations against me”. Sky News has approached him for comment on the fresh allegations set out in the Mail on Sunday.
But with Virginia Giuffre’s tragic death and posthumous memoir due out on Tuesday, Buckingham Palace will be braced for more scandal.
When Andrew gave up his titles, there was certainly a sense of relief.
There is now a sense of dread over what else could emerge.
Sky News’ royal commentator has explained why Prince Andrew has not given up being called a prince – while another expert has said “the decent thing” for him to do would be “go into exile” overseas.
Andrew announced on Friday that he would stop using his Duke of York title and relinquish all other honours, including his role as a Royal Knight Companion of the Most Noble Order of the Garter.
However, he will continue to be known as a prince.
Royal commentator Alastair Bruce said that while Andrew’s other honours and titles were conferred to him later in life, he became a prince when he was born to Elizabeth II while she was queen.
He told presenter Kamali Melbourne: “I think […] that style was quite special to the late Queen,” he said. “And perhaps the King, for the moment, thinks that can be left alone.
“It’s a matter really for the King, for the royal household, perhaps with the guidance and advice of government, which I’m sure they are taking.”
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2:49
Who pushed Andrew to drop his titles?
Since Andrew’s announcement, there has been speculation over whether any further measures will be taken – and one author has now called for him to “go into exile”.
More on Prince Andrew
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Andrew Lownie, author of The Rise And Fall Of The House Of York, said: “The only way the story will go away is if he leaves Royal Lodge, goes into exile abroad with his ex-wife, and is basically stripped of all his honours, including Prince Andrew.”
Royal Lodge is the Windsor mansion Andrew lives in with his ex-wife, Sarah Ferguson, who has also lost her Duchess of York title.
Image: Andrew and his former wife continue to live on the Windsor estate. Pic: Reuters
Mr Lownie continued: “He makes out he’s an honourable man and he’s putting country and family first. Well, if he is, then the optics look terrible for the monarchy. A non-working royal in a 30-room Crown Estate property with a peppercorn rent.
“He should do the decent thing and go. And frankly, he should go into exile.”
Mr Lownie added if the Royal Family “genuinely want to cut links, they have to put pressure on him to voluntarily get out”.
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Windsor’s take on Prince Andrew
Andrew’s decision to stop using his titles was announced amid renewed scrutiny of his relationship with paedophile Jeffrey Epstein, and fresh stories linked to the late Virginia Giuffre.
Ms Giuffre, who was trafficked by Epstein, alleged she was sexually assaulted by Andrew on three occasions – which he has always vigorously denied.
Bereaved families whose loved ones took their own lives after buying the same poison online have written to the prime minister demanding urgent action.
Warning: This article contains references to suicide
The group claims there have been “multiple missed opportunities” to shut down online forums that promote suicide and dangerous substances.
They warn that over 100 people have died after purchasing a particular poison in the last 10 years.
Among those who have written to Downing Street is Pete Aitken, whose daughter Hannah was 22 when she took her own life after buying the poison from a website.
Hannah was autistic and had ADHD. She was treated in six different mental health hospitals over a four-year period.
He said: “Autistic people seem to be most vulnerable to this kind of sort of poison and, you know, wanting to take their lives.”
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4:05
Pete Aitken speaking to Sky News
Sky News is not naming the poison, but Hannah was able to buy a kilogram of it online. Just one gram is potentially fatal.
“There’s this disparity between the concentration required for its legitimate use and that required for ending your life. And it seems quite clear you could make a distinction,” Mr Aitken said.
Analysis from the Molly Rose Foundation and the group Families and Survivors to Prevent Online Suicide Harms says at least 133 people have died because of the poison. It also says coroners have written warnings about the substance on 65 separate occasions.
The report accuses the Home Office of failing to strengthen the regulation of the poison and says not enough is being done to close dangerous suicide forums online.
Lawyers representing the group want a public inquiry into the deaths.
In a joint letter to the prime minister, the families said: “We write as families whose loved ones were let down by a state that was too slow to respond to the threat.
“This series of failings requires a statutory response, not just to understand why our loved ones died but also to prevent more lives being lost in a similar way.”
The group’s lawyer, Merry Varney, from Leigh Day, said: “The government is rightly committed to preventing deaths through suicide, yet despite repeated warnings of the risks posed by an easily accessible substance, fatal in small quantities and essentially advertised on online forums, no meaningful steps have been taken.”
Image: Hannah’s dad is one of the family members to have signed the letter
A government spokesperson said: “Suicide devastates families and we are unequivocal about the responsibilities online services have to keep people safe on their platforms.
“Under the Online Safety Act, services must take action to prevent users from accessing illegal suicide and self-harm content and ensure children are protected from harmful content that promotes it.
“If they fail to do so, they can expect to face robust enforcement, including substantial fines.”
They added that the position is “closely monitored and reportable under the Poisons Act, meaning retailers must alert authorities if they suspect it is being bought to cause harm”.
“We will continue to keep dangerous substances under review to ensure the right safeguards are in place,” they said.
Anyone feeling emotionally distressed or suicidal can call Samaritans for help on 116 123 or email jo@samaritans.org in the UK. In the US, call the Samaritans branch in your area or 1 (800) 273-TALK.