The central bank of Switzerland assured that the merger between Credit Suisse and UBS “is already a fact”

The president of the Swiss National BankThomas Jordan, stated that the acquisition of Credit Suisse by UBS is not in doubt and will not need further liquidity support from the central bank to be carried out.

“It’s a closed deal, there is a full commitment from UBS to acquire Credit Suisse,” Jordan told Reuters in an interview on Thursday.

“Right now the liquidity instruments are very large, they are bold. I think they should be enough to ensure that this transaction goes smoothly,” he added.

The Swiss central bank raised its interest rate on Thursday and insisted that rival bank UBS’s government-orchestrated purchase of disputed Credit Suisse had put an end to financial instability.

The Swiss National Bank will offer considerable support to the merger of the two largest banks in the country, the institution said in a statement, in which it ensured that the operation announced Sunday night by the federal government, financial regulators and the central bank “stopped the crisis”.

The fear of contagion

“A Credit Suisse insolvency would have had serious consequences for domestic and international financial stability and for the Swiss economy,” said Thomas Jordan, chairman of the central bank’s board of directors. “Taking that risk would have been irresponsible.”

The deal closed against the clock for 3 thousand 250 million dollars was intended to end the crisis in the global financial system after the bankruptcy of two US banks and concerns about the already known problems of Credit Suisse, that plunged the shares of the country’s second-largest bank and made customers withdraw their money.

Swiss authorities urged UBS to acquire its smaller rival after the central bank’s plan to lend up to 50 billion francs ($54 billion) to Credit Suisse failed to reassure investors and clients.

“The extensive liquidity assistance provided the necessary time to find a solution to safeguard financial stability,” the central bank said in a statement. “This solution had to be organized under considerable time pressure to be ready before the opening of the markets in Asia this week.”

To support the deal announced late Sunday, the central bank said it would provide a loan of up to 100 billion francs ($109 billion) and the government would provide another 100 billion francs as a safeguard if needed. Jordan claimed the loans were not “gifts” but were backed by collateral and subject to interest.