U.S. and European officials were quick to praise Swiss authorities for helping hammer out UBS’s
$3.25 billion deal to buy embattled rival Credit Suisse AG
that was announced on Sunday. “We welcome the announcements by the Swiss authorities today to support financial stability. 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,” said a statement from Secretary of the Treasury Janet Yellen and Federal Reserve Board Chair Jerome Powell. Meanwhile, ECB President Christine Lagarde said actions taken by the Swiss authorities were “instrumental for restoring orderly market conditions and ensuring financial stability. The euro area banking sector is resilient with strong capital and liquidity positions. In any case, our policy toolkit is fully equipped to provide liquidity support to the euro-area financial system if needed and to preserve the smooth transmission of monetary policy.” The ECB hiked its key interest rate by 50 basis points, while the Fed, dealing with a separate banking crisis in the U.S. that has seen three institutions fail, will meet this week.