Switzerland's New Big Cheese

The $25 billion merger of two of Switzerland's top financial institutions has sparked a frenzy of merger speculation. The Union Bank of Switzerland and Swiss Bank have created a single entity with more than $590 billion in assets, the reverberations of which reached American shores early as two Southern bank holding companies announced a $2.7 billion deal hours before the markets opened.

The new Swiss powerhouse, to be known as United Bank of Switzerland, will be second only to the Bank of Tokyo-Mitsubishi in Japan, which has $752.3 billion in assets. Chase Manhattan, America's largest bank, looks ever more puny, with a mere $336 billion, is ranked Number 16 in the world.

Reorganization of the Swiss banks, expected to cost about $5 billion, comes with a major downsizing downside: 13,000 jobs are likely to be cut in the U.S., Britain and Switzerland. But none of that mattered to European stock markets, all of which received a shot in the arm in afternoon trading. Back home, the merger of First American and Deposit Guaranty created a $17.4 billion company nothing on the scale of the Swiss deal, but powerful nonetheless.