The Federal Reserve has approved the takeover of Credit Suisse's US intermediate holding company by UBS.
Writing to Luigi De Genghi, partner at Davis Polk & Wardwell, which is advising UBS on the acquisition, on 14 April, the board of the Federal Reserve confirmed that following the takeover, UBS would be able to maintain two US intermediate holding companies for a period of one year.
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Following this, the company will have to hold its entire ownership interest in any US subsidiary in a single entity, unless the Fed board approves an alternative structure.
As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, any bank holding company with assets greater than $250bn acquiring voting shares of another bank holding company with assets greater than $10bn must attain the written consent of the Fed.
The Fed must consider whether such a deal would produce benefits outweighing potential adverse effects and must increase the risks to US or global financial stability, or the US economy.
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The letter also stipulated that within three months of the deal's approval, UBS must provide a plan for combining the business and operations of the two firms, and must provide quarterly updates until the plan is fully implemented.
