12.2 C
Monday, March 20, 2023

Credit Suisse plunges 20% on Wall Street: default risk grows

Must read

- Advertisement -

The Credit Suisse plummets again on Wall Street up to 20% in premarket in a new day of tension that drags down the entire financial sector.

He Credit Suisse it collapses again on Wall Street up to 20% in premarket in a new day of tension. The Swiss bank ruled out increasing its investment when seeing the difficulties that the company is going through in recent times. Thus, the bank’s shares mark new historical lows and there is a risk of default. The fall, as it happened on Monday, drags down the entire financial sector.

“The answer is absolutely no, for many reasons, apart from the simplest, which is regulatory and statutory,” said the president of the Saudi National Bank, Ammar Al Khudairy, in an interview with Bloomberg TV on Wednesday. The bank, owned by the nation’s sovereign wealth fund, This was in response to a question about whether the bank was open to new injections into Credit Suisse in the event that there was another request for additional liquidity.

- Advertisement -

After these statements, the value has plummeted and has dragged with it all the European banks. In Spain, for example, the main banks listed on the Ibex 35 register falls of more than 4% at this time.

For his part, the president of the entity, Axel Lehmann, pointed out that state aid “is not on the table” for the lender. Speaking at the Financial Sector Conference in Saudi Arabia on Wednesday, Lehmann said it would not be accurate to compare the current problems of Credit Suisse with the recent collapse of Silicon Valley Bank, mostly because banks are regulated differently.

Despite the fact that both leaders expressed their confidence in the bank’s good data to demonstrate its financial soundness, investors are clearly concerned about the entity’s future. Credit default swaps (CDS), i.e. the cost of insuring the Swiss company’s short-term bonds against default, are approaching dangerous levels, skyrocketing to over 830 points, up from 430 on Tuesday, meaning that it costs more to protect against an immediate bankruptcy than against a later default. That is to say, the risk of non-payment of the Swiss entity has multiplied by two in a matter of hours, which is dragging down the entire European banking sector.

Source: Ambito

- Advertisement -

More articles


Please enter your comment!
Please enter your name here

- Advertisement -

Latest article