UBS takeover of Credit Suisse pushed up Swiss banks' funding costs, SNB says
1. Swiss banks are facing higher liquidity costs compared to two years ago. 2. Credit Suisse's collapse and UBS's takeover contributed to this situation.
FAQ
Why Neutral?
The increase in liquidity costs could reflect market instability, similar to past banking crises where banks experience tighter funding conditions. For example, during the 2008 financial crisis, banks faced chronic liquidity issues, impacting their stock valuations but the direct effect on UBS is mitigated by its current size and stability.
How important is it?
The article highlights market conditions that could affect UBS’s operational costs and liquidity management, but does not indicate a direct threat. Given UBS's stable market leverage, the overall influence on its stock price is cautiously moderate.
Why Short Term?
Short-term impacts could arise if liquidity costs affect UBS's operational flexibility; however, due to UBS's strong capital base, long-term viability remains unaffected. Similar instances where short-term liquidity pressures led to immediate market reactions were often corrected over time.