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The last-minute rescue of Credit Suisse on Sunday may have prevented the banking crisis from exploding, but it’s a raw deal for Switzerland, and isn’t risk free.

The tie-up with its larger rival, UBS, offered the best chance of restoring stability in the banking sector, and protecting the Swiss economy in the near term.

But it leaves Switzerland exposed to a single massive financial institution, even as there is still huge uncertainty over how successful the mega merger will prove to be. Thousands of job losses are expected.

Taxpayers are on the hook for up to 9 billions Swiss francs ($9.8 billion) of future potential losses at UBS arising from certain Credit Suisse assets, provided those losses exceed 5 billion francs ($5.4 billion). The state has also explicitly guaranteed a 100 billion Swiss franc ($109 billion) loan UBS, should it need it.

Switzerland’s Social Democratic party says the newly created “super-megabank” increases risks for the Swiss economy. 

With a roughly 30% market share in Swiss banking, “we see too much concentration risk and market share control,” JPMorgan analysts wrote in a note before the deal was done. They suggested that the combined entity would need to exit or IPO some businesses.

The problem with having one single large bank in a small economy is that if it faces a bank run or needs a bailout — which UBS did during the 2008 crisis — the government’s financial firepower may be insufficient. 

UBS is in a much stronger financial position than it was in 2008 and it will be required to build up an even bigger financial buffer as a result of the deal.

“Having been chief financial officer [at Morgan Stanley] during the last global financial crisis, I’m well aware of the importance of a solid balance sheet. UBS will remain rock-solid,” UBS chairman Colm Kelleher said Sunday.

In a call with analysts, CEO Ralph Hamers said UBS would try to remove 8 billion francs ($8.9 billion) of costs a year by 2027, 6 billion francs ($6.5 billion) from cutting jobs.

According to Andrew Kenningham of Capital Economics, the “track record of shotgun marriages in the banking sector is mixed.” 

“Some, such as the 1995 purchase of Barings by ING, have proved long-lasting. But others, including several during the global financial crisis, soon brought into question the viability of the acquiring bank, while others have proven very difficult to implement.”