Shortly after the Swiss Financial Market Supervisory Authority and the Swiss National Bank (SNB) announced that UBS would acquire Credit Suisse, the Hong Kong Monetary Authority (HKMA) sought to calm nerves by reiterating that operations in the city will not be affected.
In a joint statement with the Securities and Futures Commission (SFC), Hong Kong’s de facto central bank said, “customers can continue to access their deposits with the branch and trading services provided by Credit Suisse for Hong Kong’s stock and derivatives markets.”
Credit Suisse currently operates in Hong Kong via a branch supervised by the HKMA and two licensed corporations supervised by the SFC.
The authorities also said that the local banking sector’s exposure to Credit Suisse is insignificant as the total assets of Credit Suisse’s Hong Kong branch amounted to about HK$100bn ($12.7bn), accounting for less than 0.5% of the total assets of the sector.
As of the end of February 2023, Credit Suisse was the ninth largest listed structured product issuer in Hong Kong, which is about 4% of the total market in terms of market value of outstanding units. Its licensed corporations are also not among the top 10 active brokers in the stock market and the derivatives market.
In Singapore, the Monetary of Singapore (MAS) made a similar statement saying that Credit Suisse will continue its operations in Singapore with no interruptions or restrictions.
“Customers of Credit Suisse will continue to have full access to their accounts and Credit Suisse’s contracts with counterparties remain in force. The takeover is not expected to have an impact on the stability of Singapore’s banking system,” said MAS in the statement.
In Singapore, Credit Suisse and UBS’s primary activities are private banking and investment banking and they do not serve retail customers, MAS noted.
Credit Suisse also conducts financial services under two subsidiaries, Credit Suisse Securities (Singapore) and Credit Suisse Trust, and they will continue to operate under their respective licences for the time being.
The Swiss Financial Market Supervisory Authority said in an early Monday morning announcement that Credit Suisse has experienced “a crisis of confidence” intensified by the upheavals in the US banking market this month, and it is “necessary for the authorities to take action in order to prevent serious damage to the Swiss and international financial markets.”
After coordinating with the authorities, UBS will take over Credit Suisse in full, with liquidity provided by the SNB including a loan covered by federal guarantee.
The Swiss Confederation will also provide guarantees for potential losses of certain assets that UBS will acquire as part of the transaction, according to the announcement.
Both the HKMA and MAS said they will continue to closely monitor the financial markets and developments closely and stay in touch with the Swiss authorities.