European bank stocks fall after UBS agrees to buy Credit Suisse

European Central Bank, US Federal Reserve and four other central banks announced coordinated action on Sunday to boost liquidity in US dollar swap arrangements

In a statement late on Sunday, Christine Largarde, the ECB president, welcomed “the swift action and the decisions taken by the Swiss authorities” following the UBS/Credit Suisse takeover.

European banking stocks slumped on Monday as investors reeled from the historic weekend takeover of Credit Suisse Group AG that will wipe out a class of bondholders.

Under the terms of UBS Group AG’s acquisition of Credit Suisse, holders of securities known as additional tier 1 bonds will be wiped out, potentially sending the $275 billion market for bank funding into a tailspin. UBS shares fell 8.6 per cent while Credit Suisse plunged 58 per ...