MNI BRIEF: Swift Swiss Action A Financial Stability Boost: ECB

The European Central Bank "welcomes" the swift action taken by the Swiss authorities leading to UBS's announced takeover of Credit Suisse, bank President Christine Lagarde said Sunday. The actions will be "instrumental" in restoring orderly market conditions and ensuring financial stability, Lagarde said in a statement by email following the announced deal.

Hoping that the UBS/Credit Suisse deal will draw a line under recent financial market developments, Lagarde said the euro area banking sector is "resilient, with strong capital and liquidity positions," and that the central banks has a policy toolkit "fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy.”

The Bank of England said they had engaged closely with international counterparts throughout the preparations for the announcements and "will continue to support their implementation," adding that the UK banking system "is well capitalised and funded, and remains safe and sound."

The Federal Reserve and US Treasury echoed the comments, welcoming the announcements. "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," a joint statement from Jay Powell and Janet Yellen said.