The sale of Credit Suisse to Swiss rival UBS has sent shockwaves through the global financial industry, with many experts questioning the stability of the sector as a whole. Despite UBS acquiring Credit Suisse at a bargain price, the move has wiped out the majority of the value of its current owners’ investments and has left many investors reeling.
The acquisition of Credit Suisse by UBS is the latest in a long line of mergers and acquisitions that have taken place in the banking industry over the past two decades. While such moves have often been seen as a way for banks to increase their market share and profitability, many experts are now questioning whether this consolidation is ultimately good for the industry, or whether it is simply leading to increased instability and risk.
One of the key concerns is the sheer size and complexity of the banking industry. With many banks now operating across multiple geographies, offering a wide range of services and products, and dealing with vast quantities of data and complex financial instruments, the risk of a systemic failure is arguably higher than ever.
This was certainly the case during the financial crisis of 2008, when a number of large banks collapsed or required government bailouts to prevent them from going under. The crisis was largely attributed to a combination of factors, including excessive risk-taking, poor regulatory oversight, and a lack of transparency in the industry.