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Monday, March 27, 2023

The US Treasury and the Fed highlighted the purchase of Credit Suisse by UBS

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The secretary of Treasure from United States, Janet Yellen, and the chairman of the Federal Reserve (Fed, central bank), Jerome Powell, celebrated on Sunday the purchase of the credit suisse bank by the elder Swiss bank, UBS.

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“We are pleased with the announcements made today by the Swiss authorities to support financial stability”they said in a joint statement.

The two institutions also specified that they had been “in close contact” with their international counterparts to “support the completion” of the operation.

Behind the sudden bankruptcy of the American Silicon Valley Bank (SVB), the banking sector concluded a black week in the markets.

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Concerns first centered on the Credit Suisse and First Republic cases, a San Francisco-based bank. Its stock valuation has fallen by more than 25% and 80%, respectively, in the last week.

Yellen and Powell also noted that “the US banking system is strong in terms of capitalization and liquidity, and the US financial system is resilient.”

Behind the collapse of the BLS and signature bankand the millionaire bailouts to Credit Suisse and First Republic unleashed last week, fear gripped the global financial sector and losses reached the US$465,000 million in their quotes.

It all started two years ago while the central economies held near zero rates to boost the economies after the blow caused by the crisis caused by the coronavirus pandemic. The banksfor his part, like the American BLSthey invested the deposits of their clients in long-term treasury bonds in search of performance.

It is believed that the US banks have almost $620 billion in potential losses for having invested in these types of papers, if they had to sell, according to the Bloomberg news agency.

After announcing a loss of u$1.800 million in the last trimester BLS began to suffer a strong cumshot who emptied a quarter of his coffers in 48 hourswhich ended up deriving last Friday the 10th in the intervention under federal control of the bank in what was the biggest drop since Lehman Brothers in 2008.

Source: Ambito

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