finance
Central bank assures Crédit Suisse of liquidity if necessary
The bank’s logo at the headquarters of Crédit Suisse: the Swiss bank’s shares have fallen significantly. photo
© Michael Buholzer/KEYSTONE/dpa
Investors have been concerned about the banking industry since the collapse of the US Silicon Valley Bank. Crédit Suisse is hit particularly hard, the share price falls to a record low.
In view of a price slump and great uncertainty about Crédit Suisse, the Swiss National Bank (SNB) wants to make liquidity available to the financial institution if necessary. This was announced by the central bank together with the Swiss financial market supervisory authority Finma. There is currently no evidence of a direct risk of contagion for Swiss institutions due to the problems of US banks, it said.
Crédit Suisse also tried to reassure bank customers. It is a “very well capitalized bank,” emphasized the head of Credit Suisse Switzerland, André Helfenstein, in an interview with the Swiss broadcaster “Blick TV”.
Of course, one is not satisfied with the share price, said Helfenstein. However, this has nothing to do with the security of customer deposits. The price slump is due to the fact that the bank stocks are under pressure because of the problems of US regional banks.
Stocks fall more than 30 percent
The collapse of several regional US banks recently triggered uncertainty in the banking sector. This was particularly evident on Wednesday at Crédit Suisse, which was already ailing. The bank’s shares fell in Zurich by more than 30 percent at times to a record low of 1.56 francs (1.59 euros) and closed at the end of trading with a decline of more than 24 percent.
In an interview with Bloomberg TV, the chairman of the Saudi National Bank, Ammar Abdul Wahed Al Khudairy, categorically ruled out additional support on request. The bank is a major shareholder in Crédit Suisse, which last year reported a loss of 7.3 billion Swiss francs and massive withdrawals from client assets of 123 billion.
The Swiss business of Crédit Suisse, which he manages, is well positioned and working well, said Helfenstein. The bank now wants to be close to the customers and also consistently continue the restructuring of the bank. In two years, Crédit Suisse will be a different bank than it is today, it will be more stable and concentrate on Switzerland and the wealth management business. However, because of the restructuring and the “challenging financial year 2022”, the big bank is in sight with a loss in the billions, said Helfenstein. “It’s more restless around us.”
The uncertainty also pushed other bank stocks into the red on Wednesday. The industry index Stoxx Europe 600 Banks fell by 6.9 percent. In Germany, Commerzbank shares slipped by 8.7 percent, Deutsche Bank papers lost 9.3 percent at the end of the Dax. “If a bank coughs, everyone gets hit,” commented analyst Salah-Eddine Bouhmidi from broker IG. The Dax stock index closed 3.27 percent lower at 14,735.26 points and thus fell below the round mark of 15,000 points.
Lindner with reassuring words
With regard to the uncertainty in the banking sector, Federal Finance Minister Christian Lindner emphasized the stability of the German credit system. “The federal government is in constant and intensive exchange with everyone involved,” said the FDP chairman on the ARD program “Maischberger”. “With the Bafin, we have an efficient financial supervisory authority, and we have the Bundesbank, which also has a tradition of political stability. We can therefore say very clearly: the German credit system – private banks, savings banks, cooperative institutions – is stable. And we also ensure that further.”
France’s Prime Minister Élisabeth Borne sees Switzerland’s turn in the case of Crédit Suisse. “This issue falls within the area of responsibility of the Swiss authorities. It must be regulated by them,” said Borne in the Senate in Paris. The problems at Crédit Suisse have been known for a long time, the bank does not belong to the euro zone and is therefore not subject to European banking supervision. France’s Finance Minister Bruno Le Maire will contact his Swiss counterpart in the next few hours, said Borne. French banks such as Société Générale, BNP Paribas and Crédit Agricole are also affected by the downward trend in the banking sector.
As Finance Minister Le Maire said the day before, the French banks are not exposed to any risk from the collapse of the Silicon Valley Bank in the USA, said Borne. “As you can see, we are very cautious, but the situation is very different from what we experienced in 2008, since then numerous precautionary measures have been taken for all banks in the euro zone.”