by John O’Donnell and Chiara Elisei
FRANKFURT/LONDON (Reuters) – Swiss authorities are considering imposing losses on Credit Suisse bondholders as part of the bank’s bailout, two sources familiar with the matter told Reuters on Sunday.
European regulators are concerned, however, that such a move could undermine investor confidence in the rest of Europe’s financial sector, the sources said, speaking on condition of anonymity.
No final decision has yet been made and the situation could still change, the sources said.
Losses for Credit Suisse bondholders could be greater if the Swiss institution is liquidated rather than taken over by UBS, one of the sources said.
The authorities are trying to implement a takeover of Credit Suisse by UBS before the reopening of financial markets on Monday.
FINMA, the Swiss financial market regulator, did not immediately respond to a request for comment. Credit Suisse and UBS declined to comment.
(Report John O’Donnell and Chiara Elisei; with contributions from Elisa Martinuzzi and Pablo Mayo Cerqueiro; written by Tommy Reggiori Wilkes; Claude Chendjou)
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