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Credit Suisse, one of the largest international investment banks is in deep trouble and the scale
🎞️ · 08.10.2022 · 02:07:34 ··· Samstag ⭐ 0 🎬 0
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🎬 · 08.10.2022 · 02:07:34 ··· Samstag
😎 · 03.07.2024 · 15:40:29 ··· MiTTwoch
Credit Suisse, one of the largest international investment banks is in deep trouble and the scale of problems continues to grow.
The price of Credit Suisse shares continues to drop reaching 59% decline since the start of the year. The overall decline now reaching 91% from its peak in 2007. During the last three quarters Credit Suisse reportedly lost $4 billion. Given that this is Switzerland’s second largest bank, this raises concerns over financial and economic stability of Swiss economy and financial system.
Bank’s CEO tried to reassure its bankers with various memos highlighting that there is a pool of $100 billion to pay for losses and $200 billion of assets that could be sold to cover extended losses that bank continues to experience. The markets responded negatively to this information and shares dropped about 10%.
Many analysts are now comparing Credit Suisse to another similar situation with Lehman Brothers. If Credit Suisse collapsed, would this really be a catastrophic event? Such discussions and comparisons raise serious concerns of impact on local and global markets from such an event. We could argue that Federal Reserve now has experience in dealing with these kinds of events and bailouts, but there is no guarantee that a bailout will be available for a foreign bank of such magnitude.
Credit Suisse is based in Zurich and is a household name in Switzerland. Credit Suisse has already seen serious trouble in the last 18 months after collapse of Archegos Capital generating losses for the bank estimated at $5.5 billion. Traders around the world started making bets against Credit Suisse in fear that slowing global economy will result in further losses for Credit Suisse. Both share price and confidence in the bank’s ability to sustain such heavy losses continues to drive the situation from bad to worse. Will Swiss government and regulators be able to bail out such oversized banking institution? Banking analyst Johann Scholtz doesn’t think Credit Suisse is at risk of collapsing. But this optimism is not shared by many investors and market participants. Wholesale funders are demanding a greater capital buffer from Credit Suisse. As with the financial crisis of 2008, many investors are concerned that Credit Suisse presents serious risks of contagion among European banks.
· 08.10.2022 · 02:07:34 ··· Samstag
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