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UBS will take over Credit Suisse in a deal aimed at stemming what was fast becoming a global crisis of confidence.

Credit Suisse, the 167-year-old embattled lender had been brought to the brink of financial calamity last week, despite securing a $54bn (£44bn) credit line from Switzerland’s central bank.

The credit line was agreed upon in a move aimed at reassuring markets and depositors, but it failed to stem a rush of customer withdrawal, prompting a request from the Swiss government for the rival UBS to consider a takeover.

That takeover was announced on Sunday evening – UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.

The deal is expected to be closed by the end of this year.

Colm Kelleher, chairman of UBS Group, said the agreement “represents enormous opportunities”.

He also said that his bank’s long-term aim would be to downsize Credit Suisse’s investment banking business and align it with the “conservative risk culture” of UBS.

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Axel Lehmann, chairman of Credit Suisse, described the day as “historic, sad and very challenging” for his bank and the global market.

‘The best available outcome’

Mr Lehmann said: “Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome.

“This has been an extremely challenging time for Credit Suisse and while the team has worked tirelessly to address many significant legacy issues and execute on its new strategy, we are forced to reach a solution today that provides a durable outcome.”

‘Exceptional situation’

In a statement, the Swiss central bank and other officials said that the agreement represented “a solution…to secure financial stability and protect the Swiss economy in this exceptional situation”.

It is also hoped that UBS’s takeover of its old rival will avoid the contagion of the kind seen in the financial crisis of 2008.

This is a significant deal but huge risks continue to lurk in the global financial system

This combination brings together not only Switzerland’s two biggest banks but two of the most significant financial institutions in the world.

There was reference during the press conference to discussions with Jeremy Hunt, the British chancellor.

That underlines the crucial nature of this deal as governments and financial regulators around the world race to contain the banking sector’s biggest crisis of the last 15 years.

This was always a deal that the Swiss government had resisted. It had been speculated so many times over the last decade, but the Swiss government had always wanted to maintain two national banking champions.

But let’s be clear – all the parties involved in this deal have effectively been strong-armed into it by the crisis of confidence which has erupted at Credit Suisse, and which has been fomenting for some time.

UBS has been effectively strong-armed into doing this deal by the Swiss government, and Credit Suisse has been forced to accept it – there won’t be a shareholder vote on the transaction.

The only alternative to this deal happening was going to be when financial markets opened on Monday in Asia and then in Europe, some form of nationalisation or resolution of Credit Suisse which would have deepened the sense of crisis in the industry.

This government-orchestrated rescue does avert the collapse of a major global bank but while it might be tempting to believe this draws a line under this banking crisis, remember that a week ago HSBC stepped in to buy the British arm of Silicon Valley Bank for £1 after its American parent collapsed, and a number of other mid-sized US banks have been forced to seek emergency support in the last 10 days.

All of this is a sobering reminder that as interest rates risk sharply to combat global inflationary pressures, huge risks continue to lurk in the global financial system.

Central banks insist systems are resilient

The news was welcomed by central banks in the US, Europe and in the UK.

All three insisted that banking systems within their jurisdiction are strong and resilient.

The Bank of England said: “We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation.

“The UK banking system is well capitalised and funded, and remains safe and sound.”

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Credit Suisse rescue: What now for the UK’s banks?

A deal likely to ripple through global markets

Credit Suisse is one of the world’s largest wealth managers and is also one of 30 banks ranked as systemically important, meaning the deal is likely to ripple through global markets on Monday.

It is also one of the largest investment banking employers in the City of London, employing around 5,000 people.

In a memo to employees on Sunday, Credit Suisse said there would be no immediate impact on clients or day-to-day working operations, adding that branches and global offices would remain open.

It comes after a difficult few weeks for the banking sector, with the collapse of US lenders Silicon Valley Bank and Signature Bank.

The UK branch of SVB was rescued by HSBC for £1, but a number of other mid-sized American lenders have also been forced to seek emergency funding.

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Donald Trump announces sweeping global trade tariffs – including 10% on UK imports

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Donald Trump announces sweeping global trade tariffs - including 10% on UK imports

Donald Trump has announced a 10% trade tariff on all imports from the UK – as he unleashed sweeping tariffs across the globe.

Speaking at a White House event entitled “Make America Wealthy Again”, the president held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.

“This is Liberation Day,” he told a cheering audience of supporters, while hitting out at foreign “cheaters”.

Follow live: Trump tariffs latest

He claimed “trillions” of dollars from the “reciprocal” levies he was imposing on others’ trade barriers would provide relief for the US taxpayer and restore US jobs and factories.

Mr Trump said the US has been “looted, pillaged, raped, plundered” by other nations.

President Donald Trump holds a signed executive order during an event to announce new tariffs in the Rose Garden of the White House, Wednesday, April 2, 2025, in Washington. (AP Photo/Evan Vucci)
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Pic: AP

His first tariff announcement was a 25% duty on all car imports from midnight – 5am on Thursday, UK time.

Mr Trump confirmed the European Union would face a 20% reciprocal tariff on all other imports. China’s rate was set at 34%.

The UK’s rate of 10% was perhaps a shot across the bows over the country’s 20% VAT rate, though the president’s board suggested a 10% tariff imbalance between the two nations.

It was also confirmed that further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.

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Trump’s tariffs explained

The ramping up of duties promises to be painful for the global economy. Tariffs on steel and aluminium are already in effect.

The UK government signalled there would be no immediate retaliation.

Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers. That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.

“The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.

“We have a range of tools at our disposal and we will not hesitate to act. We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.

“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the government will do everything necessary to defend the UK’s national interest.”

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Who showed up for Trump’s tariff address?

The EU has pledged to retaliate, which is a problem for Northern Ireland.

Should that scenario play out, the region faces the prospect of rising prices because all its imports are tied to EU rules under post-Brexit trading arrangements.

It means US goods shipped to Northern Ireland would be subject to the EU’s reprisals.

The impact of a trade war would be expected to be widely negative, with tit-for-tat tariffs risking job losses, a ramping up of prices and cooling of global trade.

Research for the Institute for Public Policy Research has suggested more than 25,000 direct jobs in the UK car manufacturing industry alone could be at risk from the tariffs on car exports to the US.

The Society of Motor Manufacturers and Traders (SMMT) had said the tariff costs could not be absorbed by manufacturers and may lead to a review of output.

The tariffs now on UK exports pose a big risk to growth and the so-called headroom Chancellor Rachel Reeves was forced to restore to the public finances at the spring statement, risking further spending cuts or tax rises ahead to meet her fiscal rules.

Read more:
What do Trump’s tariffs mean for the UK?
The rewards and risks for US as trade war intensifies

A member of the Office for Budget Responsibility (OBR), David Miles, told MPs on Tuesday that US tariffs at 20% or 25% maintained on the UK for five years would “knock out all the headroom the government currently has”.

But he added that a “very limited tariff war” that the UK stays out of could be “mildly positive”.

He said: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.

“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”

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Donald Trump’s tariffs will have consequences for globalisation, the US economy and geopolitics

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Donald Trump's tariffs will have consequences for globalisation, the US economy and geopolitics

For decades, trade and trade policy has been an economic and political backwater – decidedly boring, seemingly uncontroversial. 

Trade was mostly free and getting freer, tariffs were getting lower and lower, and the world was becoming more, not less, globalised.

But alongside those long-term trends, there were some serious consequences.

Trump latest: US president announces sweeping global trade tariffs

Mature, developed economies like the UK and US became ever more reliant on cheap imports from China and, in the process, saw their manufacturing sectors shrink.

Large swathes of the rust belt in the US – and much of the Midlands and North of England – were hollowed out.

And to some extent that’s where the story of Donald Trump’s “Liberation Day” really began – with the notion that free trade and globalisation had a darker side, a side he wants to remedy via tariffs.

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He imposed a set of tariffs in his first term, some on China, some on specific materials like steel and aluminium. But the height and the breadth of those tariffs were as nothing compared with the ones we have just heard about.

Not since the 1930s has the US so radically increased the level of tariffs on all nations across the world. Back then, those tariffs exacerbated the Great Depression.

It’s anyone’s guess as to what the consequences of these ones will be. But there will be consequences.

Consequences for the nature of globalisation, consequences for the US economy (tariffs are exceptionally inflationary), consequences for geopolitics.

President Trump with his list of tariffs for various countries. Pic: Reuters
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Imports from the UK will face a 10% tariff, while EU goods will see 20% rates. Pic: Reuters

And to some extent, merely knowing that little bit more about the White House’s plans will deliver a bit of relief to financial markets, which have fretted for months about the imposition of tariffs. That uncertainty recently reached unprecedented levels.

But don’t for a moment assume that this saga is over. Nothing of the sort. In the coming days, we will learn more – more about the nuts and bolts of these policies, more about the retaliatory measures coming from other countries.

We will, possibly, get more of a sense about whether some countries – including the UK – will enjoy reprieves from the tariffs.

To paraphrase Churchill, this isn’t the end of the trade war, or even the beginning of the end – perhaps just the end of the beginning.

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Heathrow bosses were warned about power supply after stolen cables turned off runway lights, MPs told

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Heathrow bosses were warned about power supply after stolen cables turned off runway lights, MPs told

Heathrow bosses were warned its power supply was vulnerable less than a week before a major outage, and a terminal could have got some flights moving by mid-morning rather than being shut for a day, a committee of MPs has heard.

The chief executive of Heathrow Airline Operators’ Committee Nigel Wicking told MPs of the Transport Committee he raised issues about resilience on 15 March after cable and wiring theft took out lights on a runway.

Mr Wicking said he believed Heathrow’s Terminal 5 could have been ready to receive repatriation flights by “late morning” on the day of the closure, as “there was opportunity also to get flights out”.

Politics latest: ‘Disastrous’ not to shut Heathrow during outage, airport boss says

A fire at an electricity substation in west London meant the power supply was disrupted to Europe’s largest airport for a day – causing travel chaos for nearly 300,000 passengers, the committee heard.

“I’d actually warned Heathrow of concerns that we had with regard to the substations and my concern was resilience”, said Mr Wicking, the head of a body representing more than 90 airlines using Heathrow Airport.

“So the first occasion was to team Heathrow director on the 15th of the month of March. And then I also spoke to the chief operating officer and chief customer officer two days before regarding this concern.

“And it was following a number of, a couple of incidents of, unfortunately, theft, of wire and cable around some of the power supply that on one of those occasions, took out the lights on the runway for a period of time. That obviously made me concerned.”

Other problems

The biggest challenge was getting information, Mr Wicking said.

The desire for information on the outage and closure was so large that a Teams call on the day of the closure was “maxed out” with “a thousand participants”, he added.

However, Heathrow chief executive Thomas Woldbye said keeping the airport open during last month’s power outage would have been “disastrous”.

There was a risk of having “literally tens of thousands of people stranded in the airport, where we have nowhere to put them”, Mr Woldbye told MPs.

Fire surveillance and CCTV systems were down as a result of having limited electricity, he added, meaning it would not have been safe to reopen.

‘The most expensive airport in the world’

Heathrow should have top quality infrastructure and service, Mr Wicking said.

“It is the most expensive airport in the world with regard to passenger challenges. So from our perspective, that means we should actually have the best service. We should have the best infrastructure,” he added.

Aerials show burned substation which shut Heathrow Airport
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Aerials show burned substation which shut Heathrow Airport

A review on resilience at Heathrow was done in 2018, he told MPs, but was told it was “not for sharing” with airlines.

“I think it is for sharing now because frankly, we’re paying enough”, Mr Wickling said he told Mr Woldbye.

“I don’t feel that we should be paying more attention for further resilience. The resilience should have been there in the first place.”

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