This is CNBC's live blog covering European markets.

European stock markets closed higher Monday as investors digested news of UBS's takeover of Credit Suisse.

The pan-European Stoxx 600 index was lower in the first hours of trade before moving into positive territory, and closed 1% higher, with all sectors in the green.

Even banks reversed earlier sharp losses to close 1.3% higher. Meanwhile mining stocks were up 2.8% and insurance stocks were up 1.8%.

UBS on Sunday agreed to buy its embattled rival Credit Suisse for 3 billion Swiss francs ($3.2 billion). Following the emergency rescue, the combined bank will have $5 trillion of invested assets, according to UBS.

Credit Suisse shares plunged 56% on Monday, while UBS climbed from losses to a 1.3% gain.

UBS Chairman Colm Kelleher said over the weekend the acquisition is "attractive" for UBS shareholders but that "as far as Credit Suisse is concerned, this is an emergency rescue."

"In theory, there is no reason for the Credit Suisse crisis to extend, as what triggered the last quake for Credit Suisse was a confidence crisis – which doesn't concern UBS - a bank outside of the turmoil, with, in addition, ample liquidity and guarantee from the SNB (Swiss National Bank) and the government," Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, said in a note quoted by Reuters.

Asia-Pacific markets largely fell on Monday, with eyes firmly on the European banking situation.

U.S. stocks were mixed in early trade.

Mining stocks up 3% to lead gains

Mining stocks led gains in European equity markets, with the sector up 3% in the last hour of trading.

Chile-based copper mining company Antofagasta was up 4.9% in late afternoon, followed by British miners Anglo American, which saw a 4.4% uptick.

Glencore and Boliden also made gains of more than 3.5%.

Bank of America and UBS moved Switzerland-based Glencore to "buy" from "neutral" territory.

— Hannah Ward-Glenton

Euro zone banks' liquidity levels above requirements, ECB's Lagarde says

European Central Bank President Christine Lagarde said Monday that euro zone banks have capital and liquidity levels well beyond their requirements as she sought to reassure jittery markets of the health of Europe's financial sector.

"We are very confident that the capital and liquidity positions of the euro area banks are very satisfactory, with significant capital ratio and liquidity coverage ratio way in excess of requirements," Lagarde told the European Parliament.

She also said that the ECB was prepared to step in should further support be necessary: "We stand ready with our policy toolkit to provide liquidity support to the euro area financial system."

The remarks come after UBS on Sunday agreed to buy its embattled rival Credit Suisse for 3 billion Swiss francs ($3.2 billion) in an historic deal aimed at curtailing wider contagion across the global banking system.

It followed a fraught five-day struggle by Swiss regulators to stem further fallout after a $54 billion lifeline from the Swiss National Bank failed to shore up Credit Suisse's plummeting share price.

— Karen Gilchrist

Banking sector fundamentals are healthier than during previous crises, Goldman Sachs strategist says

Peter Oppenheimer, chief global equities strategist at Goldman Sachs, says that the banking sector is healthier than during previous crises and that the current issues are not systemic.

UBS shares up 5%

UBS shares moved from losses through the morning to trade 5.1% higher at 2 p.m. London time.

Investors are chewing over its agreement to buy Credit Suisse 3 billion Swiss francs ($3.25 billion) as well as its knock-on effects for global markets and implications for shareholders and bondholders.

Credit Suisse shares remained 53% lower at 0.86 Swiss francs ($0.93).

— Jenni Reid

Bank of England rate decision 'on a knife edge'

The Bank of England's Thursday decision on whether to hike rates is now "on a knife edge," strategists at ING said in a note.

Economists had expected one more 25 basis point hike following the central bank's 50 basis point hike to 4% in February, given signs inflation is starting to cool.

"One thing that's clear from recent communications is that the bar for pausing rate hikes is much lower at the BoE than at the European Central Bank," the ING Bank team said. "Policymakers have been clear that most of the impact of past hikes is still to hit, which is partly a function of the low prevalence of variable rate mortgages in the UK."

However, they noted that in the aftermath of last year's "mini-budget," the Bank of England used targeted measures to address market volatility, showing its commitment to separating fighting inflation and maintaining financial stability.

"A calmer financial market backdrop would keep a 25bp hike on the table. Further volatility could easily see a 'no change' decision, with non-committal guidance that further hikes could be enacted if the situation changes," they said, adding the committee is likely to be divided.

— Jenni Reid

Dow pops at the open

As U.S. stocks opened, the Dow Jones Industrial Average gained 193 points, or 0.61%. Meanwhile, the S&P 500 rose 0.18%, while the Nasdaq 100 fell 0.5%.

— Hakyung Kim

UBS’ takeover of Credit Suisse is probably the ‘smoothest option,’ analyst says

Elisabeth Rudman, global head of financial institutions at DBRS Morningstar, says, however, "that doesn't mean that there won't be some volatility in the meantime."

UBS' CDS rate — a key risk gauge — soars after deal to buy Credit Suisse

A key risk gauge for UBS is surging after it agreed to buy its troubled Swiss rival Credit Suisse.

CDS — a type of financial derivative — rise in value as the risk of default increases. The contracts, which are traded, allow some investors to hedge against a fall in share or bond prices, while others might seek to profit in a declining market.

UBS' five-year CDS rate doubled to 180 basis points between Mar. 14 and this morning, according to S&P Global Market Intelligence. It's up by 63 basis points from Friday's close.

— Ganesh Rao

EU banking agencies draw distinction between risky Swiss and European bonds

An EU banking regulating trifecta comprising the European Central Bank Supervision, the Single Resolution Board and the European Banking Authority has issued a statement welcoming the "comprehensive set of actions" implemented by the Swiss government during UBS' takeover of troubled Zurich rival Credit Suisse.

The trio expressed support of Additional Tier (AT1) bond instruments as "an important component of the capital structure of European banks," following the write-down to 0 of 16 billion Swiss francs ($17.26 billion) of such Credit Suisse debt.

Citing the order in which shareholders and creditors of a troubled bank should bear losses — imposed following the Great Financial Crisis — the regulators said: "In particular, common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier 1 be required to be written down. This approach has been consistently applied in past cases and will continue to guide the actions of the SRB and ECB banking supervision in crisis interventions."

Switzerland is not part of the European Union and, as such, doesn't come under the European regulators' remit.

"The European authorities are clearly differentiating European AT1 from Swiss AT1, which is known to be a very different regime, as the outcomes from the UBS/CS merger announced yesterday indicate," said the analysts of BofA Global Research.

— Ruxandra Iordache

We need consolidation across Europe’s banking sector, portfolio manager says

Europe needs consolidation across its banking sector, Cole Smead, CEO of Smead Capital Management, told CNBC as he discussed UBS' rescue of Credit Suisse.

Credit Suisse fallout could trigger rise in activist shareholders, investor says

Shareholders, particularly large ones like major banks and sovereign wealth funds, are likely reexamining how they invest and what influence they have over the institutions they back financially in the wake of the Credit Suisse crisis, one asset manager told CNBC.

Major investors "will now probably want to reappraise the way they make financial investments" and "will probably want to start embedding people so they properly understand what is happening inside their investments," said Simon Fentham-Fletcher, chief investment officer at Abu Dhabi-based Freedom Asset Management.

"This might see a rise in activist shareholders not just wanting a board seat but real eyes and ears," he added, noting that the last few weeks of market turmoil will undoubtedly put a significant dent in investor desire for risk.

From a risk perspective, he said, "generally I think that we will see a pull back in all risk appetite as confidence has just taken a severe beating, and this combined with the apparent upending of the capital structure rules will undoubtedly make people pause."

— Natasha Turak

Saudi National Bank loses over $1 billion on Credit Suisse investment

Saudi National Bank is nursing major losses in the wake of Credit Suisse's failure after a deal was reached for UBS to buy the embattled Swiss lender for $3.2 billion.

Saudi National Bank — Credit Suisse's largest shareholder — confirmed to CNBC Monday that it had been hit with a loss of around 80% on its investment.

The Riyadh-based bank holds a 9.9% stake in Credit Suisse, having invested 1.4 billion Swiss francs ($1.5 billion) in the 167-year-old Swiss lender in November of last year, at 3.82 Swiss francs per share. Under the terms of the rescue deal, UBS is paying Credit Suisse shareholders a dramatically lower 0.76 Swiss francs per share.

Despite the loss, Saudi National Bank says its broader strategy remains unchanged. Shares of the lender were up 2.1% on Monday at 11 a.m. London time.

The Qatar Investment Authority, Credit Suisse's second-largest investor, holds a 6.8% stake in the bank and also suffered a steep loss.

Read the full report here.

— Natasha Turak

Credit Suisse crisis: The market is in ‘seek and destroy’ mode, analyst says

James Sym, head of equities at River and Mercantile, discusses UBS' deal to buy Credit Suisse and the outlook for the European banking sector.

European bond yields fall

European bond yields fell Monday as markets remained jittery amid the UBS takeover of Credit Suisse.

Germany's benchmark 10-year bond yield was down just under 10 basis points, to 2.025%, at 11:00 a.m. local time.

Yields on U.K. 2-year and 10-year bonds were both down around 9 basis points, to 3.138% and 3.188%.

Bond yields move inversely with prices.

It comes after the U.S. Federal Reserve announced on Sunday it would co-ordinate with the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank to enhance the provision of liquidity through the standing U.S. dollar swap line arrangements.

Joost van Leenders, senior investment strategist at Van Lanschot Kempen, said in a note it was "very difficult to have a clear view of what's happening in the banking sector" and financial markets feared something broader was at play.

— Jenni Reid

European banking stocks slide

Bank stocks slid at the open Monday, with Credit Suisse and UBS driving the fall.

Banking stocks were down 2.75% by 9:17 a.m. London time, paring some losses.

Credit Suisse shares were down 58%, while UBS recovered slightly to trade 9% lower by 9:17 a.m. London time after the latter agreed to an emergency takeover of its embattled rival.

Other banks also lingered in the red, with ING Groep, Deutsche Bank and Barclays all down over 5%.

— Katrina Bishop

European stocks open lower

European stocks were lower in early trade as investors assessed a news-filled weekend that resulted in a UBS takeover of Credit Suisse.

The Stoxx 600 index was 1.4% lower at 8:30 a.m. London time, with losses across the major stock exchanges and in all sectors bar utilities.

— Jenni Reid

Credit Suisse down 62% in Julius Baer pre-market trade

Credit Suisse shares were down 61.95% in pre-market trade via private bank Julius Baer, Reuters reported at 8:14 a.m. CET, following news of the former lender's takeover by UBS.

UBS Group shares lost 7.1%.

Credit Suisse has until the Swiss market open at 9:00 a.m. CET to suspend trading in its shares. It has yet to do so.

"With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation," the Swiss National Bank said of the deal over the weekend.

Credit Suisse shares fell 25.5% last week.

— Jenni Reid

CNBC Pro: Time to buy the tech rally? Hedge fund manager Dan Niles and others reveal their top picks

The tech sector was one bright spot last week as the banking crisis rocked markets.

But is it time to buy into the rally? Market pros urge caution — but think some stocks are set to outperform.

CNBC Pro subscribers can read more here.

— Weizhen Tan

UBS buys Credit Suisse in $3.2 billion takeover

UBS finalized an agreement to buy its rival Credit Suisse for $3.2 billion. Swiss regulators played a key role in facilitating the deal in an effort to quell a contagion threatening the banking sector.

Credit Suisse saw its shares tumble last week after its largest investor, the Saudi National Bank, declined to provide additional funding. Despite subsequent measures from Credit Suisse and Swiss regulators to calm investors' fears — including a loan of up to 50 billion Swiss francs ($54 billion) — shares plunged 25.5% by the end of the week.

Under the deal, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. The combined bank will have $5 trillion of invested assets, according to UBS.

— Hakyung Kim

CNBC Pro: From Tesla to under-the-radar battery stocks: Wall Street has a playbook for the EV boom

The opportunity in global EVs is massive, with the European market alone set to be worth $300 billion by 2030, according to estimates from Bernstein.

While EV automakers may be an obvious play, Wall Street analysts have named a slew of stock picks across a range of sectors as a way to cash in.

Pro subscribers can read more here.

— Zavier Ong

European markets: Here are the opening calls

European markets are set to start the new trading week in mixed territory Monday.

The U.K.'s FTSE 100 index is expected to be flat at 7,331, Germany's DAX 10 points higher at 14,773, France's CAC down 2 points at 6,924 and Italy's FTSE MIB down 59 points at 24,928, according to data from IG.

On the data front, euro zone trade balance figures for January are set to be released.

— Holly Ellyatt