As Switzerland digested the news of Credit Suisse’s takeover by rival UBS, the headlines were unequivocally bleak. The deal is a “historic scandal,” wrote the daily Tages-Anzeiger. It marks the “end of an era,” according to Switzerland’s public broadcaster SRF. The country’s leading daily, Neue Zürcher Zeitung, found even stronger words: “A zombie is gone, but a monster has been created.” read one headline.

The Federal Reserve raised the target range for its benchmark interest rate by 0.25% on Wednesday as it battles stubborn inflation and a banking crisis which has pushed the central bank into taking its most significant emergency actions since the onset of the pandemic.

The rate hike brings the Fed's policy rate, the federal funds rate, to a new range of 4.75%-5%, the highest since October 2007.

The Federal Reserve hiked interest rates by 0.25 percentage points on Wednesday after numerous failures in the banking sector had prompted some analysts on Wall Street to call for a pause.

The quarter-point hike is the ninth consecutive rate increase by the Fed since March of last year as part of the U.S. central bank’s program of quantitative tightening undertaken in response to high inflation. The Fed’s baseline interest rate range is now set to 4.75 to 5 percent.

The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter of a point, forging ahead with its fight against stubborn inflation despite a spate of bank failures and a growing crisis within the financial sector. 

The unanimous decision puts the key benchmark federal funds rate at a range of 4.75% to 5%, the highest since 2007, from near zero just one year ago. It marks the ninth consecutive rate increase, following a half-point hike in December and four jumbo-sized 75-basis-point hikes before that.

Imperiled bank Credit Suisse was bought by Swiss banking giant UBS Sunday, hours before New York Community Bank announced plans to purchase Signature Bank. The purchases were meant to calm nervous depositors in the wake of Silicon Valley Bank’s demise earlier this month, but roiling markets on Monday were a reminder that there’s still a lot of uncertainty about whether the banking crisis can be contained.

Credit Suisse’s CS -6.94%decrease; red down pointing triangle nearly 167-year run came to an abrupt end Sunday when its larger and longtime rival UBS Group UBS -5.50%decrease; red down pointing triangle agreed to buy it, marking the biggest deal in the global banking system in years.

UBS’s deal to take over Credit Suisse for around $3 billion came together quickly over the weekend, though problems at Credit Suisse brewed for years. The Swiss lender has long been viewed as the problem child of the banking system. 

Switzerland’s biggest bank, UBS, has agreed to buy its ailing rival Credit Suisse in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month.

“UBS today announced the takeover of Credit Suisse,” the Swiss National Bank said in a statement Sunday. It said the rescue would “secure financial stability and protect the Swiss economy.”

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.

Shares of Credit Suisse and UBS led losses on the pan-European Stoxx 600 index on Monday morning, shortly after the latter secured a 3 billion Swiss franc ($3.2 billion) “emergency rescue” of its embattled domestic rival.

Credit Suisse shares collapsed by 60% at around 11:20 a.m. London time (7:20 a.m. ET), while UBS traded 5% lower.

Europe’s banking index was down nearly 1.8% around the same time, with lenders including ING, Societe Generale and Barclays all falling over 2.7%.