Yellen, Powell welcome Swiss bank deal as step toward market stability

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Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen on Sunday embraced UBS’s purchase of fellow Swiss bank Credit Suisse, a move intended to calm financial markets.

“We welcome the announcements by the Swiss authorities today to support financial stability,” they said in a joint statement. “The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient. We have been in close contact with our international counterparts to support their implementation.”

The deal comes amid jitters in the U.S. banking system after the failure of two regional lenders led American authorities to step in to protect uninsured depositors.

UBS said in a statement that it would pay the equivalent of $3.25 billion to buy Credit Suisse, in what will be a merger of two institutions considered important to the global financial system.

“With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the Swiss National Bank said in its statement. It added that the deal was made possible with the support of the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank.

The Fed later also announced it would take steps to make it easier for five foreign central banks to exchange their currencies for dollars. The move, coordinated with the other central; banks including the European Central Bank, is aimed at easing strains in global funding markets.

Starting Monday, those currency swaps will happen daily rather than weekly.