How scandal and mistrust ended Credit Suisse's 166-year run

Credit Suisse Group AG, once one of the stalwarts of the global financial system, is no more.

After tense talks over the weekend, UBS Group AG agreed to buy Credit Suisse in an all-share deal for about $3.25 billion, less than the market value of troubled US lender First Republic Bank. The government-brokered sale marks the Swiss bank's final fall from grace, succumbing to a crisis of confidence that threatened to spread to global financial markets.

For 166 years, Credit Suisse helped position Switzerland as a linchpin of international. finance and went toe-to-toe with Wall Street titans before a steady drumbeat of scandals, legal issues and management upheaval undermined investor trust. While the decay was years in the making, the end came quickly.

In the aftermath of the collapse of Silicon Valley Bank last weekend, long-suffering Credit Suisse quickly became a focal point of concern. After top shareholder Saudi National Bank told Bloomberg Television on Wednesday that it would "absolutely not" invest more in the lender, a rout was on.

A $54 billion financing backstop from the Swiss central bank-sealed in the dead of night on Thursday to calm jitters-failed to become the lifeline Credit Suisse had hoped. With the country's banking sector at risk, Swiss authorities stepped in to push UBS to become a reluctant white knight.

The Swiss government "regrets that CS wasn't able to master its own difficulties-that would have been the best solution," Finance Minister Karin Keller-Sutter said at a press conference in Bern on Sunday.

"Unfortunately, the loss of confidence from the markets and customers was no longer able to be halted." Designated as one of the world's 30 systemically important banks, Credit Suisse is the biggest casualty of the financial turmoil triggered by central banks as they tighten monetary policy to rein in inflation. While concerns about further contagion are sure to persist, the sale to UBS avoids a disorderly collapse.