UBS and Credit Suisse are reportedly considering a merger that would create one of Europe's largest banks

• A Swiss financial blog reported Monday that Credit Suisse and competitor UBS are considering a merger.
• The potential deal would create a European financial powerhouse with nearly 1.6 trillion euros in deposits.
• Both firms declined to comment on what they called "rumors and speculation."

Leadership at two of the largest Swiss banks are exploring a merger that could create the biggest bank in Europe, according to a report from Inside Paradeplatz on Monday.

Chairmen of both UBS and Credit Suisse have been involved in the potential deal, nicknamed Signal, which could be announced as soon as early 2021, the financial news blog reported, citing two unidentified sources at the banks.

Inside Paradeplatz, which takes its name from Zurich's main financial square where both banks are headquartered, reported that Switzerland's Finance Minister, Ueli Maurer, has also been involved in the discussions.

A spokesperson for UBS said the bank doesn't comment on "rumors and speculation." Credit Suisse also declined to comment.

Shares of Credit Suisse rose about 4.8% in trading Monday while UBS rose about 2.5%.

A merger of the two financial powerhouses would create one of the largest banks in Europe, with deposits totaling around 1.6 trillion euros. That would rank the combined bank as fourth in the continent, behind HSBC, BNP Paribas, and Credit Agricole, according to S&P data.

Any deal could also result in up to 15,000 job cuts, or 15% of total staff worldwide, Inside Paradeplatz reported.