The Board of Governors of the Federal Reserve (the U.S. central bank) announced on Friday that it has approved UBS Group's acquisition of the American subsidiaries of Credit Suisse, thus removing another key obstacle to completing the rescue deal brokered by Switzerland. The board stated that UBS has committed to providing the U.S. central bank with a plan for integrating its activities and operations in the United States with those of Credit Suisse within three months of the deal's completion. The statement noted that the plan will include stricter requirements, some of which pertain to the bank's liquidity standards due to the increased size of the institution.
The U.S. central bank must review bank mergers when a bank with total assets exceeding $250 billion acquires any voting shares in a company with assets of $10 billion or more. After years of scandal and losses, Credit Suisse was on the verge of collapse before its Zurich-based rival UBS stepped in to rescue it through a merger deal overseen and financed by Swiss authorities last month. UBS agreed to buy Credit Suisse for three billion Swiss francs ($3.3 billion), a mere fraction of its previous market value.
