Home » Historic price drop – SNB would support Credit Suisse if necessary – News

Historic price drop – SNB would support Credit Suisse if necessary – News

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Historic price drop – SNB would support Credit Suisse if necessary – News

  • If necessary, the Swiss National Bank will make liquidity available to the ailing Credit Suisse.
  • According to a joint letter from the SNB and Finma, there is no evidence of a direct risk of contagion for Swiss institutions due to the problems of US banks.
  • During the course of the day, the CS share fell below the two franc mark for the first time.

The Swiss National Bank (SNB) wants to provide liquidity to the ailing Credit Suisse if necessary. The central bank announced this on Wednesday evening together with the Swiss financial market supervisory authority Finma.

Credit Suisse meets the capital and liquidity requirements of systemically important banks. In addition, there is currently no evidence of a direct risk of contagion for Swiss institutions due to the problems of the US banks. Credit Suisse then said: “We welcome the statement of support.”

The mood on the financial markets has deteriorated significantly. In a veritable downward slide, Credit Suisse shares fell by 31 percent to a new record low of CHF 1.55 on Wednesday. CS shares closed at 1,697 francs, down 24.24 percent on the previous day.

The crash took other bank stocks with it: The stocks of the Swiss industry leader UBS lost 8.5 percent.

The price crash was triggered by a statement by the major shareholder Saudi National Bank that it would not invest any more money in the bank. The President of the Saudi bank clearly ruled out that the Saudi bank would inject any more money into CS.

CS boss: “Our liquidity base is very strong”


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After the crash of the Credit Suisse shares, CEO Ulrich Korner expressed in a television interview on the situation of the big bank. «We are a strong bank. We are a global bank under Swiss regulation. Basically, we meet and exceed all regulatory requirements,” said Körner in an interview with the Asian broadcaster CNA. “Our capital and liquidity base is very, very strong.” The situation of CS is not comparable with that of Silicon Valley Bank.

Also the CEO of Credit Suisse Switzerland, Andre Helfenstein, has been trying to reassure bank customers amid the CS stock price crash. Credit Suisse is still a “very well capitalized bank,” he emphasized in an interview with “Blick TV.” Of course, the bank isn’t happy with where the share price is, Helfenstein said. However, the share price has nothing to do with the security of customer deposits, he emphasized. The drop in the share price has to do with the fact that the bank stocks are under pressure because of the problems of US regional banks.

ECB surveys banks about Credit Suisse

According to insiders, the European Central Bank (ECB) has contacted banks it monitors about its exposure to Credit Suisse. There were corresponding contacts, said two people from the European supervisory environment of the Reuters news agency.

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Legend:

Dark clouds are currently moving over the big bank.

Keystone/Ralph Orlowski

However, one of the people pointed out that these are problems specific to Credit Suisse and not systemic. The Wall Street Journal reported that ECB supervisors are looking at the financial links between Credit Suisse and euro-zone banks.

US Treasury Department to review US banks’ involvement with CS


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The US Treasury Department is also said to be actively examining the commitment of US banks to CS following the recent price turbulence surrounding the struggling Credit Suisse. That’s what people familiar with the matter said to the “Bloomberg” news agency, as reported.

The ministry wants to know how exposed the banks are to CS. It also works closely with the European supervisory authorities.

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