Asian stocks are sliding as much as 3% today after Swiss lender UBS agreed to buy its banking rival Credit Suisse in a $3.25 billion takeover. The government-backed deal corresponds to a capitalization that is far below the level at which Credit Suisse was trading on Friday. The Swiss National Bank said the deal was the best way to restore confidence in financial markets and the credit environment in Switzerland. Credit Suisse saw its shares tumble last week after its largest investor, the Saudi National Bank, declined to provide additional funding. Meanwhile, banking stocks are expected to fall on Monday for yet another session as investors pull back from positions in First Republic, amid concerns over the state of the banking sector.

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