Switzerland’s largest bank, UBS, is reportedly in advanced negotiations to buy all or part of Credit Suisse, its struggling rival. The announcement comes after Credit Suisse admitted to finding “material weakness” in its financial reporting, leading to a significant drop in share prices. The emergency $54 billion lifeline from the Swiss National Bank failed to resolve the issue, causing regulators to step in and try to facilitate a deal before markets reopen on Monday.

Credit Suisse’s shares fell by 24% on Wednesday, leading to a general sell-off on European markets and fears of a wider financial crisis. The Swiss government held an emergency meeting on Saturday night, but so far, there has been no official statement on the progress of negotiations. UBS has reportedly asked the Swiss government to cover approximately $6 billion in costs if it were to purchase Credit Suisse, according to sources quoted by Reuters. Any deal may also result in significant job losses.

Credit Suisse, which was founded in 1856, has faced a series of scandals in recent years, including money laundering charges. It reported a loss of 7.3 billion Swiss francs ($7.9 billion) in 2022, its worst year since the financial crisis of 2008, and has warned that it does not expect to be profitable until 2024. In contrast, UBS made a profit of $7.6 billion in 2022.

The situation at Credit Suisse has coincided with the failure of two US-based lenders, Silicon Valley Bank and Signature Bank, raising fears over the health of the global banking system. There are concerns that Credit Suisse’s shares could continue to fall, leading to a further sell-off and a more significant financial crisis. The Swiss government and regulators are working to resolve the situation before the markets open on Monday.