Banking giant UBS is in discussions to take over all or parts of Credit Suisse, with the boards of Switzerland's two biggest lenders set to meet separately over the weekend. The Swiss National Bank and regulator FINMA are organising the talks in an attempt to build confidence in the country's banking sector. On Friday evening, Swiss regulators informed their counterparts in the United States and United Kingdom that the merger of the two banks was their "Plan A" to salvage the confidence in Credit Suisse. Several other options are also under discussion between the two banks as both sides try to evaluate regulatory constraints in different jurisdictions.
In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.
They discuss an 85-year long study by Harvard researchers indicating that, while particular roles can’t be reliably correlated with dissatisfaction and burnout, certain job characteristics can be. Jobs that require little human interaction and don’t offer opportunities to build meaningful relationships with co-workers tend to have the most miserable employees, the study found.
Chris and Saied look at news that Bitcoin has climbed to a nine-month high as turmoil in the banking sector drives some investors to turn to digital assets. It rose as far as $28,567, its highest since mid-June, and was last up 0.9%, amid growing expectations that central banks would slow the pace of interest rate hikes.
They also offer some thoughts on contingent convertible bonds, or CoCos, often described as high-yield investments with a hand grenade attached. The UBS takeover of Credit Suisse has pulled the pin on $17 billion of them.
Join Chris and Saied for this fascinating and informative conversation.
What You’ll Learn in this Show:
- What’s happened at the Federal Open Market Committee (FOMC) meeting on Tuesday.
- Why Switzerland is known for having low levels of financial risk and high levels of privacy.
- Why the axing of Credit Suisse’s $17 billion contingent convertible (CoCo) debt has big implications for the newly combined bank and the wider market.
- Bitcoin's climb to a nine-month high as turmoil in the banking sector sparks a rally.
- And so much more...
Markets and Mayhem via Twitter
"UBS in talks to acquire Credit Suisse" (article from The Financial Times)
Ulrich Körner via Wikipedia
"UBS buys Credit Suisse for $3.2 billion as regulators look to shore up the global banking system" (article from CNBC)
"UBS Agrees to Buy Credit Suisse for More Than $3 Billion" (article from The Wall Street Journal)
"Big Banks Best Positioned to Weather Crisis: Morningstar" (article from The Street)
"Credit Suisse's $17 billion of risky bonds are now worthless" (Bloomberg via Instagram)
"Why $17 billion in risky debt was wiped out in Credit Suisse rescue deal" (Bloomberg via Instagram)
Zerohedge via Twitter
"Bitcoin climbs to 9-month high as bank turmoil sparks rally" (article from Reuters)
"85-year Harvard study found that people with this type of job tend to be the unhappiest" (article from CNBC)
"Local Banks Could Leave Gaps That Are Hard to Fill" (article from The Wall Street Journal)