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Race to save Credit Suisse.

 

Credit Suisse
Urgent talks were underway this weekend to stop a crisis at Credit Suisse, causing a market meltdown on Monday. Many options are being considered, including a deal for UBS to buy all or part of its once-mighty Swiss banking rival.

After the collapse of several banks in America, Credit Suisse has become the focus of the concerns for the European banking sector and was hammered on the stock market last week. Its Swiss neighbour and potential white knight UBS is worth £46 billion.

Amid fears that a crisis of confidence gripping the Swiss bank could spread, the chief executive of Britain’s biggest bank, HSBC, stressed that Britain’s banking system was not facing a crisis.

In an interview with The Sunday Times, Noel Quinn said: «Do I think the UK has a banking crisis before it? No, definitely not. I think the UK is well capitalised, profitable, with strong liquidity and good regulation».

The collapse of SVB shook the American banking sector and on Thursday forced America’s 11 biggest banks — the likes of JP Morgan and Goldman Sachs — to throw a $30 billion lifeline to mid-sized bank First Republic.

That exacerbated fears about Credit Suisse, which has lost investor confidence as it overhauls its business after losses and fines over its exposure to the collapsed investment fund Archegos, the supply chain finance firm Greensill and a Mozambique kick-backs scheme. The Credit Suisse management, led by new chief executive Ulrich Koerner, has been arguing that they can turn around a business that made £6.5 billion of losses last year but has a capital ratio of 14.1 per cent — well above regulatory requirements and a sharp contrast to the situation banks were in during the 2008 crisis.

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  1. Teo19 March 2023 at 11:39

    Credit Suisse should have been sold by now. It was clear from the start that things will only get worse. And with everything else happening in the industry things got a lot worse, a lot quicker. It's only a matter of time before everything is lost with this bank. Unless drastic measures are taken its future is unavoidable.

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    1. Natalie19 March 2023 at 14:42

      Let's see if UBS will buy the bank. I think it won't take this one alone. They will probably buy around 30-50% of it but won't want to take the whole risk on their own. They need help from the Swiss government and from other EU banks.

      Delete

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