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Thursday, March 30, 2023

Credit Suisse shares stabilized on bailout announcement after record drop

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Credit Suisse shares have rallied on Wall Street after the worst slide in its history, after announcing that a loan of up to 50 billion Swiss francs ($53.7 billion) has been authorized.

The actions of Credit Suisse stabilized on Wall Street after the worst collapse in its history, after announcing that a loan for up to 50 billion Swiss francs ($53.7 billion) and a debt repurchase for an additional $3.325 billion was authorized to provide confidence to investors and depositors.

In this context, The Swiss bank ended stable on Wall Street (with an increase in the aftermarket) and on the Swiss stock market it advanced 4.4%. 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.

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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. Finally, the financial rescue materialized.


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.

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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