The actions of Credit Suisse They jump strongly this Thursday, March 16, at the start of operations in the Swiss market and also in the Wall Street premarket. Financial paper rose to 40% and then stabilized at 23%. Meanwhile, the New York stock market advances more than 10%. The increases come after days of speculation that led the stock to hit record lows this past Wednesday and after the entity announced that the Swiss National Bank will extend a lifeline of up to $54 billion to allay savers’ concerns. and investors.
Shares in the Zurich-based entity had fallen 24% on Wednesday to a record low. The bank had become the focus of investor fears after the resounding collapses of Silicon Valley Bank and Signature Bank in the United States and had pushed the world’s major markets lower.
Credit Suisse said on Thursday that it was taking “decisive action” to bolster its liquidity by borrowing up to $54 billion from the Swiss central bank, after the fall in its shares intensified fears about a broader crisis in bank deposits.
The problems of the Swiss entity have shifted the focus of attention of investors and regulators from the United States to Europe, where Credit Suisse led a selloff of bank shares after its biggest investor said it could not provide more financial help due to regulatory restrictions.
The Swiss bank’s announcement earlier this morning in Europe helped trim some of those losses, although trading was volatile.
In his statement early Thursday morning, Credit Suisse said it was exercising its option to borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.
Investor attention is now focused on actions by Asian central banks and other regulators to restore confidence in the banking system, as well as on the exposure of regional companies to Credit Suisse.
In a joint statement on Wednesday, Swiss financial regulator FINMA and the country’s central bank sought to ease investor fears about Credit Suisse, saying it “meets the capital and liquidity requirements imposed on systemically important banks.” . As indicated, the entity could access liquidity from the central bank if necessary. Credit Suisse welcomed the statement of support from the Swiss National Bank and FINMA.
Credit Suisse would be the first major global bank to be granted such a lifeline since the 2008 financial crisis, although central banks have granted liquidity more generally to entities in times of stress in the markets, including the coronavirus pandemic.
The failure of SVB last week, followed by that of Signature Bank two days later, set off a roller coaster ride for global bank stocks and bonds this week, with investors discounting guarantees offered by US President Joe Biden, and the emergency measures that gave banks access to more financing.
FINMA and the Swiss central bank said there were no indications of direct contagion risk to Swiss institutions from the turmoil in the US banking market.
Source: Ambito
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