He bank of England will have no objection UBS acquiring fellow Swiss lender Swiss credit amid a frantic race to avoid a repeat of the 2008 global banking crash, reports said.
UBS is already talking this weekend about a takeover of (part of) its compatriot.
The $54 billion loan from the Swiss central bank to Credit Suisse has failed to stop the decline share price that is 10 percent lower.
Coupled with the collapse of Silicon Valley Bank last week, whose UK arm was to be acquired by HSBC for the nominal sum of £1, the crisis engulfing Credit Suisse has fueled fears of contagion in the international banking system.
The Financial Times said UBS could pay up to $1 billion in a deal that would require the Swiss government to change the law to avoid a shareholder vote.
With UBS, Credit Suisse and the government would like to announce a takeover as early as Sunday afternoon. The UK central bank has reportedly approved such a deal.
The Bank of England declined to comment on its position, first reported by Sky News.
Credit Suisse, which employs 5,000 people in the UK, is categorized by the global Financial Stability Board as one of only 30 “systemically important” lenders in the global banking system. Any deal could also lead to significant job losses.
Two major US banks also failed in a turbulent week for the sector.
Mohammed El-Erian, chief economic adviser to German financial services company Allianz, told the BBC: “This is not a voluntary action, this is a gun marriage and it is being done to restore financial stability.
“Without it, Credit Suisse could end up in a death spiral in which it becomes much more difficult to conduct its banking activities.
“That could raise questions for other banks at a time when there are also banking concerns in the United States.”
Mr El-Erian said the current turmoil could cause banks to become more “risk averse”, leading to a drop in credit availability.