The Swiss government is reportedly set to announce a deal Sunday that will allow UBS, the largest bank in Switzerland, to buy its beleaguered rival, Credit Suisse, for $2 billion, according to the Financial Times.

The announcement comes amid mounting concerns over the potential collapse of Credit Suisse creating a contagion in the banking sector. Credit Suisse saw its stock price plunge and deposit outflows continue last week despite receiving a $54 billion financial lifeline from the Swiss National Bank to bolster its liquidity. The deal was first reported by the Financial Times.

Regulators faced a sense of urgency to push the deal through on Sunday before markets opened Monday as the specter of Credit Suisse potentially failing next week loomed over the negotiations. Credit Suisse, which has been in business for 167 years, is one of 30 globally systemically important banks, which heightened worries about how global financial markets would react to its implosion.

Talks about UBS' potential acquisition of Credit Suisse heated up over the weekend and involved the Swiss government's financial regulators giving it the green light after the sides came to an agreement over the more complex terms of the deal.

As a large global financial institution, Credit Suisse has an investment banking arm that it has tried to spin off in recent years, in addition to a local retail bank. UBS' acquisition of those divisions of Credit Suisse, in whole or in part, could create additional regulatory complexity for the firm given its own activities in those areas.