Swiss National Bank: Backing for Credit Suisse

Status: 03/15/2023 10:08 p.m

The share price of the major bank Credit Suisse has come under massive pressure. In order to calm the markets, the Swiss currency watchdogs promised help “if necessary”. Credit Suisse also emphasizes that it is “very well” capitalized.

The Swiss National Bank (SNB) rushes to the aid of Credit Suisse (CS), which is threatened by a loss of confidence. “If necessary, the SNB will make liquidity available to CS,” said the central bank and the financial market supervisory authority Finma in a joint statement.

Credit Suisse meets the capital and liquidity requirements of systemically important banks. There is currently no evidence of a direct risk of contagion for Swiss institutions due to the problems of US banks, it said.

Credit Suisse boss appeases customers

Credit 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.

Major shareholder does not want to inject any further money

The collapse of several regional US banks recently triggered uncertainty in the banking sector. This had a particularly strong impact on Credit Suisse, which was already suffering. 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.

Investors also took to their heels because the Saudi major shareholder Saudi National Bank announced at noon that it would not be able to provide the major Swiss bank with any further money. Credit Suisse reported a loss of 7.3 billion Swiss francs and massive withdrawals of client assets of 123 billion last year.

Also price losses at other banks

The dramatic price drop at the second largest Swiss bank had triggered concerns worldwide during the course of the day and also dragged down the papers of other European banks. The industry index Stoxx Europe 600 Banks fell by 6.9 percent. In Germany, Commerzbank shares slipped by 8.7 percent.

Regulators, governments and other financial institutions around the world tried to assess the risks. Individual governments called on Switzerland behind the scenes to intervene. In the evening, the authorities then came on the scene. “FINMA and the SNB are following developments very closely and are in close contact with the Federal Department of Finance to ensure financial stability,” the statement said.

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