Switzerland’s announcements had an effect on the main European stock exchanges, which opened on Thursday the 16th, with gains after a day of losses of 3 to 4%.
The actions of Credit Suisse rose sharply as trading opened early Thursday the 16th after receiving support from the Swiss central bank to reassure markets following the worst session in its history on Wednesday the 15th.
At the start of talks, the bank’s shares soared 30.82% on the stock exchange Zurich to 2.22 Swiss francs, after hitting an all-time low of 1.55 francs on Wednesday, when shares finished the day down 24.24%.
This was announced by Credit Suisse it would borrow up to 50 billion francs or US$53.7 billion (R$285 billion) to the central bank. At the same time, the bank announced in a press release a series of debt buyback operations for a value of approximately 3 billion Swiss francs.
“These measures are a decisive step to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” the bank’s chief executive said. Ulrich Koernerin a statement.
After an impressive silence since the beginning of the week, the Swiss central bank and the Swiss financial supervisor finally came out in defense of CS on Wednesday 15th. “Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks,” the Swiss National Bank (SNB, Central) and the Financial Market Supervisory Authority (FINMA) said in a joint statement.
“If needed, the SNB will provide liquidity to Credit Suisse,” the institutions added.
The collapse of Credit Suisse follows the bankruptcy of Silicon Valley Bank (SVB) from the Californiafollowing a wave of mass withdrawals from clients leaving the institution struggling to stand on its own feet.
“It seems more and more investors are eyeing CS as the next most likely domino to fall,” said Finalto analyst Neil Wilson.
But if Credit Suisse faces “existential problems,” it’s a different set of difficulties for the banking sector, he believes. “There’s a really big chance of failure,” he told her.
Unlike the SVB, the Swiss institution is one of 30 international banks deemed too big to fail, which also imposes stricter rules to withstand major shocks. The concern extends beyond Switzerland and the US Treasury said it was “following the situation and in contact with international counterparts”.
Switzerland’s announcements had an effect on the main European stock exchanges, which opened on Thursday the 16th, with gains after a day of losses of 3 to 4%.
Early on, Paris rose 1.49%, Frankfurt 1.52%, London 1.40%, Madrid 1.98% and Milan 1.48%.
Accumulation of setbacks
Concerns about the effects of the SVB bankruptcy continue to weigh heavily in Asia. Tokyo lost 0.8% at the end, Hong Kong 1.72% and Shanghai 1.12%. The decline in the share of the Swiss bank accelerated on Wednesday 15, after its largest shareholder, the Saudi National Bankhaving declined to increase its stake.
Asked by Bloomberg TV whether the Saudi bank could invest more money, its president Loving Al Judairy he said: “The answer is absolutely not, for a variety of increasingly simple reasons, which are regulatory and statutory,” he said.
The Saudis currently own 9.8% of the Swiss bank. “If we go over 10%, some new rules come into effect,” she explained.
The Saudis became CS’s first shareholders during a capital raise launched in November to finance a major restructuring of the bank. For the past two years, the bank has struggled after the collapse of the British financial firm Greensillwhich marked the beginning of a series of scandals which weakened the bank.
Some shareholders ended up giving up, such as the American investment company Harris Associatesone of its most prominent backers, who revealed last week that he had sold his entire stake./AFP
Source: Terra
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