Regulators are scrambling to seal a UBS takeover of Credit Suisse before markets reopen in Zurich (late Monday AEDT), amid fears a collapse of the 167-year-old lender could lead to broader banking instability.

UBS is asking the Swiss government to cover about $US6 billion ($9 billion) in legal costs and potential future losses in any deal, and as many as 10,000 jobs may be cut worldwide if the two banks combine.