ZURICH, March 23 ― The UBS takeover of stricken bank Credit Suisse was orchestrated to preserve global financial stability, Switzerland's central bank said today, insisting that the Swiss banking system was in good health.

With Credit Suisse shares in freefall last week after a collapse in investor confidence, the Swiss government, the central bank and the financial regulators forced a shotgun marriage Sunday between the two biggest banks in the country.

Swiss National Bank chairman Thomas Jordan said any other solution ― analysts considered sale to a foreign bank or an orderly bankruptcy ― would have thrown the Swiss economy into jeopardy and could have sparked an even wider financial crisis around the world.

The implosion of Credit Suisse came after the collapse of two tech-lending banks in the United States triggered fears of international contagion.

“It was a lack of trust, of confidence, in different banks and that then contributed to this unstable situation,” central bank chief Jordan told a press conference at the SNB's Zurich headquarters.

“We were in an extremely fragile environment where we had this banking crisis in the United States and enormous nervousness in financial markets in general.

“Under those circumstances, going into resolution would have triggered a bigger financial crisis, not only in Switzerland, but most likely, globally.”

He said any outcome other than the country's biggest bank taking over Credit Suisse “would not work in order to stabilise the situation”.

It would have created “enormous uncertainty and would then also put the Swiss financial system, including the Swiss economy, in jeopardy ― but not only Switzerland. It could also be then the trigger of a bigger, larger global financial crisis.”

Despite the turbulence, the SNB said in a statement that the takeover had “put a halt to the crisis”.

Jordan said that the creation of an even bigger UBS, and its absorption of its main domestic rival, would mean that the Swiss authorities would have to take care to ensure there was enough competition for banking services in the wealthy Alpine nation.

“The focus has to be ensuring that we can maintain financial stability under all circumstances,” he said.

“The Swiss banking system is very resilient and robust,” Jordan insisted. ― AFP