The crisis at Credit Suisse is coming to a head – economy

And another negative record: On Wednesday, the shares of the major Swiss bank Credit Suisse fell below two francs for the first time. It fell by more than 20 percent in the course of the morning and at noon it did not even cost 1.80 francs. At the same time, the premiums for credit default insurance at the bank (“credit default swaps”) reached new highs – this is also an indicator of the severe and now existential crisis in which the once proud and traditional bank from Zurich is stuck.

Numerous, mostly home-made scandals have weakened the bank in recent years. In the meantime, with Chairman of the Board of Directors Axel Lehmann and CEO Ulrich Körner, a new management team is at the helm, which has just launched a complex and expensive reform program. But in the fall, rumors of the bank’s impending bankruptcy led to huge outflows of money – and from what the bank has recently published, it’s clear that the outflow hasn’t stopped yet.

Now the collapse of the Silicon Valley Bank (SVB) a few days ago has fueled the dynamic: In Europe, too, banks are experiencing a series of price falls, including in Germany – at the forefront: the ailing Credit Suisse. It did publish its annual report on Tuesday, which had already been promised for last Thursday but was then withheld due to concerns from the US Securities and Exchange Commission – at least. It contained the not unimportant message that the management will not receive a bonus for 2022 and will earn significantly less overall than just a few years ago.

State aid is “currently not an issue,” it says

At a conference of the US bank Morgan Stanley on Tuesday, CEO Körner then tried to allay concerns about the SVB: The commitment to the SVB is “not significant”, said Körner, the bank also has sufficient liquidity, the corresponding Rate is more than 150 percent. It didn’t help much: on Wednesday morning, the fatal course development was already apparent.

Chairman of the Board of Directors Lehmann is trying to counteract this: State aid, such as that which national competitor UBS had to seek in 2008, is “currently not an issue” for Credit Suisse, he told the Bloomberg agency on Wednesday at a conference in Saudi Arabia. “We have strong capital ratios and a strong balance sheet.”

But from the same country came the statement that made the day black for Credit Suisse: Credit Suisse’s largest shareholder, the Saudi National Bank, concluded in an interview Bloomberg TV on Wednesday to continue to support Credit Suisse should there be a need for additional liquidity. The President of the Saudi National Bank, Ammar Al Khudairy, pointed to regulatory problems with an increase in the share, which is currently just under ten percent. Opposite the agency Reuters However, Al Khudairy was basically satisfied with the bank’s restructuring program. And added the sentence aimed at reassurance: “I don’t think they need extra money.”

The course development on Wednesday speaks a different language. And: Every moment of shock of this kind costs the bank valuable trust and ultimately customer money. Again Tages-Anzeiger on Wednesday reportednot only has the asset management of Credit Suisse recently had to accept outflows, but also the Swiss subsidiary, which is otherwise considered an island of stability: Within a year, customers there have withdrawn around 28 percent of their deposits.