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Swiss central bank offers Credit Suisse liquidity aid after stock market crash

The Swiss central bank said it would provide a liquidity backstop to Credit Suisse after its share price fell by up to 30%.

In a joint statement with regulator Finma, the Swiss National Bank said: “There is no indication that the current turmoil in the US banking market poses a direct risk to Swiss financial institutions.”

credit suisse Executives met with representatives of SNB and Finma throughout Wednesday afternoon after the stocks and bonds of the US banks plunged in value following the collapse of three US banks last week. The Financial Times first reported that Credit Suisse has requested a public statement of support.

“Credit Suisse meets the higher capital and liquidity requirements applicable to systemically important banks,” said SNB and Finma. “Furthermore, the SNB will provide liquidity to globally active banks when needed.”

Credit Suisse shares fell to CHF1.56 on Wednesday.

The sharp decline in stocks follows the collapse of US Bank of Silicon Valley and the chairman of the Saudi National Bank, which acquired a 10% stake in Credit Suisse last year, denies providing further financial assistance to Swiss banks. It happened after

The bank has been hit by a string of scandals in recent years, including the largest trading loss in its 167-year history over the implosion of Archegos Capital and the loss of a $10 billion investment fund linked to a failed financial company. There is such a thing as closure that gives. green sill.

Credit Suisse shares fell 24% on Wednesday, dropping its market capitalization below CHF7 billion ($7.6 billion) after the bank raised CHF4 billion in capital just months ago. The stock is down 39% this year and has fallen 85% over the past two years.

“It seems inevitable that the Swiss National Bank will have to step in and provide a lifeline,” said Octavio Marenzi, an analyst at Opimas. ” [Swiss National Bank] The Swiss government is fully aware that the failure of Credit Suisse and even the loss of deposit holders would damage Switzerland’s reputation as a financial centre. ”

Credit Suisse declined to comment.

In a call with hundreds of clients on Wednesday, JPMorgan analysts said the Swiss National Bank could intervene to guarantee retail and wealth management deposits at Credit Suisse and force the sale of the investment bank. filed, said a person familiar with the call.

One of the people said blanket deposit guarantees and investment bank closures were offered as one of several options, not the most likely.

Analysts say Credit Suisse is the most likely scenario for M&A and acquisition by local rival UBS if things go bad for Credit Suisse. An equity injection from SNB and subsequent investment bank sale was also presented as a possible outcome, as was a self-help restructuring by UBS selling a minority stake in a Swiss retail bank. It will be used to fund the remaining restructuring of the Group.

Analysts at JPM said they don’t see bankruptcy as a viable option given the negative impact on Credit Suisse and Switzerland.

Separately, the European Central Bank is asking EU lenders to disclose their exposures to Swiss lenders, a person familiar with the matter told the Financial Times.

The ECB discussed issuing a public statement to calm the situation, but decided as of Wednesday afternoon not to issue a statement for fear of furthering market panic, the person added. rice field.

“The Treasury Department is monitoring this situation and is in communication with our global counterparts,” a U.S. Treasury Department spokeswoman said Wednesday.

Credit Suisse’s woes have rekindled a broad selloff in European and US banking stocks already rocked this week by the failure of Silicon Valley Bank.

BNP Paribas shares fell 10% and Societe Generale fell 12%. Deutsche Bank and Barclays both fell 9%, while ING fell 10%. Stock markets across the board fell, with the European-wide Stox 600 down his 2.9%. Selling spread to Wall Street as the S&P 500 fell 1.7% in bank-led early trading.

Citigroup shares fell 2.9%, while JPMorgan fell 7%. US regional lenders, which were at the center of the selloff earlier this week, fell more sharply.

Stoxx 600 banks lost 16% this month in the crash triggered by the SVB collapse. Investors said the Credit Suisse issue was a reminder that European banks also have large holdings of bonds hit by rising interest rates.

“Credit Suisse is an isolated case,” said Charles-Henry Monshaw, chief investment officer at Sis Bank. We have to, and we are currently facing a large unrealized loss.”

Credit Suisse 5-year credit default swap spreads showed investor bearishness, widening to 1,145bp on Wednesday from 350bp at the start of the month.

Asked on Bloomberg TV if the Saudi National Bank would be open to funding Credit Suisse if it receives a request for additional funding, SNB Chairman Amar Alqdaily said: increase. statutory. “

He said a 10% or more stake in Credit Suisse would impose additional regulatory requirements. In comments to journalists at the event, he said he was happy with the bank’s restructuring plans and added that he didn’t feel it needed more capital.

Credit Suisse chairman Axel Lehmann said in a separate interview at a financial conference in Saudi Arabia on Wednesday that financial support from the Swiss government was “not a topic” for lenders.

“We are well capitalized and have a strong balance sheet,” he said, adding that the bank was undergoing a sweeping restructuring aimed at halting years of scandals and losses. “We’ve already taken the medicine.”

A day earlier, CEO Ulrich Kellner said customers were still withdrawing money from banks, but at a much lower level than at the end of last year when Credit Suisse was in trouble. 111 billion franc outflow.

Credit Suisse said on Tuesday that its auditor, PwC, Identified “significant weaknesses” In financial reporting management, which led to a delay in issuing its annual report last week after the U.S. Securities and Exchange Commission called for further clarification of deficiencies.

Additional reporting by Katie Martin, Martin Arnold, Sam Jones and James Polity

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The Swiss central bank said it would provide a liquidity backstop to Credit Suisse after its share price fell by up to 30%.In a joint statement with regulator Finma, the Swiss National Bank said: “There is no indication that the current turmoil in the US banking market poses a direct risk to Swiss financial institutions.” credit suisse Executives met with representatives of SNB and Finma throughout Wednesday afternoon after the stocks and bonds of the US banks plunged in value following the collapse of three US banks last week. The Financial Times first reported that Credit Suisse has requested a public statement of support.“Credit Suisse meets the higher capital and liquidity requirements applicable to systemically important banks,” said SNB and Finma. “Furthermore, the SNB will provide liquidity to globally active banks when needed.”Credit Suisse shares fell to CHF1.56 on Wednesday.The sharp decline in stocks follows the collapse of US Bank of Silicon Valley and the chairman of the Saudi National Bank, which acquired a 10% stake in Credit Suisse last year, denies providing further financial assistance to Swiss banks. It happened afterThe bank has been hit by a string of scandals in recent years, including the largest trading loss in its 167-year history over the implosion of Archegos Capital and the loss of a $10 billion investment fund linked to a failed financial company. There is such a thing as closure that gives. green sill.Credit Suisse shares fell 24% on Wednesday, dropping its market capitalization below CHF7 billion ($7.6 billion) after the bank raised CHF4 billion in capital just months ago. The stock is down 39% this year and has fallen 85% over the past two years. “It seems inevitable that the Swiss National Bank will have to step in and provide a lifeline,” said Octavio Marenzi, an analyst at Opimas. ” [Swiss National Bank] The Swiss government is fully aware that the failure of Credit Suisse and even the loss of deposit holders would damage Switzerland’s reputation as a financial centre. ”Credit Suisse declined to comment.In a call with hundreds of clients on Wednesday, JPMorgan analysts said the Swiss National Bank could intervene to guarantee retail and wealth management deposits at Credit Suisse and force the sale of the investment bank. filed, said a person familiar with the call.One of the people said blanket deposit guarantees and investment bank closures were offered as one of several options, not the most likely. Analysts say Credit Suisse is the most likely scenario for M&A and acquisition by local rival UBS if things go bad for Credit Suisse. An equity injection from SNB and subsequent investment bank sale was also presented as a possible outcome, as was a self-help restructuring by UBS selling a minority stake in a Swiss retail bank. It will be used to fund the remaining restructuring of the Group. Analysts at JPM said they don’t see bankruptcy as a viable option given the negative impact on Credit Suisse and Switzerland.

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Separately, the European Central Bank is asking EU lenders to disclose their exposures to Swiss lenders, a person familiar with the matter told the Financial Times.The ECB discussed issuing a public statement to calm the situation, but decided as of Wednesday afternoon not to issue a statement for fear of furthering market panic, the person added. rice field.”The Treasury Department is monitoring this situation and is in communication with our global counterparts,” a U.S. Treasury Department spokeswoman said Wednesday.Credit Suisse’s woes have rekindled a broad selloff in European and US banking stocks already rocked this week by the failure of Silicon Valley Bank.BNP Paribas shares fell 10% and Societe Generale fell 12%. Deutsche Bank and Barclays both fell 9%, while ING fell 10%. Stock markets across the board fell, with the European-wide Stox 600 down his 2.9%. Selling spread to Wall Street as the S&P 500 fell 1.7% in bank-led early trading.Citigroup shares fell 2.9%, while JPMorgan fell 7%. US regional lenders, which were at the center of the selloff earlier this week, fell more sharply. Stoxx 600 banks lost 16% this month in the crash triggered by the SVB collapse. Investors said the Credit Suisse issue was a reminder that European banks also have large holdings of bonds hit by rising interest rates.“Credit Suisse is an isolated case,” said Charles-Henry Monshaw, chief investment officer at Sis Bank. We have to, and we are currently facing a large unrealized loss.”Credit Suisse 5-year credit default swap spreads showed investor bearishness, widening to 1,145bp on Wednesday from 350bp at the start of the month.Asked on Bloomberg TV if the Saudi National Bank would be open to funding Credit Suisse if it receives a request for additional funding, SNB Chairman Amar Alqdaily said: increase. statutory. “He said a 10% or more stake in Credit Suisse would impose additional regulatory requirements. In comments to journalists at the event, he said he was happy with the bank’s restructuring plans and added that he didn’t feel it needed more capital.

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Credit Suisse chairman Axel Lehmann said in a separate interview at a financial conference in Saudi Arabia on Wednesday that financial support from the Swiss government was “not a topic” for lenders.“We are well capitalized and have a strong balance sheet,” he said, adding that the bank was undergoing a sweeping restructuring aimed at halting years of scandals and losses. “We’ve already taken the medicine.”A day earlier, CEO Ulrich Kellner said customers were still withdrawing money from banks, but at a much lower level than at the end of last year when Credit Suisse was in trouble. 111 billion franc outflow.Credit Suisse said on Tuesday that its auditor, PwC, Identified “significant weaknesses” In financial reporting management, which led to a delay in issuing its annual report last week after the U.S. Securities and Exchange Commission called for further clarification of deficiencies.Additional reporting by Katie Martin, Martin Arnold, Sam Jones and James Polity

Video: Credit Suisse: What’s Next for Banks in Crisis? | | FT Films

https://www.ft.com/content/0324c5a6-cecd-4fb3-85b3-7cdc99a33e4e Swiss central bank offers Credit Suisse liquidity aid after stock market crash

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