You can be on Entrepreneur’s cover!

'A Day We Hoped Would Not Come': Competing Swiss Bank UBS Buys Credit Suisse Plus, New York Community Bank bought a large portion of another failed institution, Signature Bank. Here's the latest on the banking drama.

By Gabrielle Bienasz

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

DANIEL LEAL / Contributor I Getty Images
London Swiss bank location of UBS.

As an embattled bank, Credit Suisse was something of a loose brick already, but over the weekend, the block went ahead and hit the floor.

UBS, a fellow Swiss-based bank, purchased its rival, Credit Suisse, on Sunday, per The New York Times.

"This is a historic day in Switzerland, but frankly, a day we hoped would not come," the chairman of UBS, Colm Kelleher said to analysts on Sunday, according to the outlet.

Credit Suisse was one of a few other banks, including U.S.-based Signature Bank, that faced financial problems as the panic and scrutiny generated by the collapse of Silicon Valley Bank earlier this month spread.

Related: 'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.

On Sunday, the Federal Deposit Insurance Corporation (FDIC) announced that a subsidiary of New York Community Bank would purchase "substantially all deposits and certain loan portfolios," of Signature Bank.

"The 40 former branches of Signature Bank will operate under New York Community Bancorp's Flagstar Bank, N.A., on Monday, March 20, 2023," the FDIC added.

The government organization assumed control of Signature Bank and SVB earlier this month. Signature experienced its own bank run, it said, after the SVB collapse.

Related: This 'Problem Child' Bank in Europe Is Triggering Anxiety About the Financial System, Again

Credit Suisse, however, had a different path to the weekend's events. The bank began in 1856 to help finance the expansion of railroads in Switzerland, according to the company's about page. It played in the big leagues with the likes of JPMorgan Chase and was once "an emblem of Swiss pride," according to the Times.

Its primary business was managing money for the super-rich. But the bank had a difficult time in the last decade or so, and had "long been," as the Wall Street Journal put it, "viewed as the problem child of the banking system."

In the last few years, the bank was caught in scandals including money laundering related to cocaine, fraud related to tuna, and a CEO who was spying on a former employee, per Reuters. In the fall, the bank said it expected a loss of about $1.6 billion as it shed clients.

Last week, in the wake of the SVB crisis, the bank experienced withdrawals in the billions, per the Times.

The deal that closed over the weekend meant that UBS, a competitor of Credit Suisse's, would buy the bank for $3.2 billion, with assistance from The Swiss National Bank.

In times of crisis, banking, consolidation can often occur, like in the wake of the 2008 recession, when JPMorgan Chase bought Washington Mutual and Bear Sterns, per Jeremy Kress, professor at the Ross School of Business at the University of Michigan.

As Andrew Ross Sorkin noted in DealBook, the collapse of SVB and the purchase of Credit Suisse have a "tangential" connection, minus the fact that the instability in the banking sector has contributed to wider anxiety in financial markets. This could mean more to come, the newsletter added.

Banks in the U.S. also banded together last week and put together a $30 billion package to rescue First Republic Bank, which also struggled after the SVB crisis.

Gabrielle Bienasz is a staff writer at Entrepreneur. She previously worked at Insider and Inc. Magazine. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.


I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.


6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.


You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.