ZURICH (dpa-AFX) - It had been a "historic, sad and challenging day." These were the words used by the Chairman of the Board of Directors of Credit Suisse, Axel Lehmann, to describe the end in the dramatic wrangling over the future of the seriously troubled Swiss banking house. After a marathon negotiation lasting several days, the solution was finalized, which Swiss President Alain Berset celebrated with relief as "solid" on Sunday evening: UBS will take over Credit Suisse for three billion francs (just over 3 billion euros). The rescue was greeted with relief by central banks worldwide.

"This is an emergency rescue," said UBS Group Chairman Colm Kelleher. The crisis of confidence that doomed Credit Suisse would have reverberated internationally if the bank had crashed, Swiss Finance Minister Karin Keller-Sutter said. "It would almost certainly have triggered a financial crisis," the minister said.

UBS's takeover of Credit Suisse is the most significant banking merger in Europe since the financial crisis 15 years ago. The deal will make UBS a mammoth institution, larger than Deutsche Bank. The Swiss National Bank (SNB) is supporting the takeover by providing 100 billion francs (about 101 billion euros) in liquidity assistance to both banks. To reduce risks for UBS, the Swiss government is also issuing a CHF9 billion guarantee to UBS to cover potential losses, it said. The measures will ensure that the SNB can provide Credit Suisse with extensive liquidity if needed, it said.

European Central Bank President Christine Lagarde stressed that the measures were "crucial to restoring orderly market conditions and ensuring financial stability." She said the euro area banking sector is resilient and has strong capital and liquidity. Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen spoke of a move to shore up financial stability. The Bank of England also welcomed the "comprehensive package of measures unveiled by the Swiss authorities to support financial stability." It said the U.K. banking system is well capitalized and funded and remains safe and sound.

The Swiss government in Bern has been under considerable pressure to stabilize the situation and shore up Credit Suisse. That's because Credit Suisse is one of the world's largest asset managers and is among the 30 global systemically important banks whose failure would shake the international financial system.

President Berset said "the Federal Council is convinced that the takeover is the best solution to restore confidence." Credit Suisse had lost customer confidence, liquidity had to be guaranteed. That is why the SNB had provided a loan, he said. The transaction was important for the stability of the Swiss financial center. A rapid stabilizing solution was indispensable. SNB President Thomas Jordan stressed that reputation was central to Switzerland's economy. According to the Financial Market Authority (Finma), the takeover will not fail due to competition regulations.

Finance Minister Keller-Suter said the federal government gave the CHF 9 billion guarantee to cushion Credit Suisse risks. "Taxpayers have little risk" - any other scenario would have cost more. He said one has a private partner and a solid bank taking over Credit Suisse. It was not a government bailout, the minister stressed. The federal government had merely provided a guarantee.

Credit Suisse had recently suffered from a considerable loss of investor confidence. Its share price had fallen to a record low after the bank's largest investor ruled out providing further capital and the institution continued to struggle with cash outflows.

The merger is expected to create a company with more than $5 trillion in assets under management, according to UBS. UBS Chairman Kelleher said the acquisition would be attractive to UBS shareholders. "But as far as Credit Suisse is concerned, this is a stopgap measure." UBS will pay the purchase price in its own shares, equivalent to 0.76 francs per Credit Suisse share certificate.

UBS, with more than 72,000 employees, had total assets equivalent to 1,030 billion euros in 2022, while Credit Suisse, with just over 50,000 employees, had total assets equivalent to 535.44 billion euros. UBS had made a profit of $7.6 billion (currently 7.07 billion euros) in 2022. Credit Suisse, on the other hand, reported a loss of 7.3 billion francs (7.4 billion euros)./mrd/oe/DP/zb