Author: JUSTIN LANE | EFE
The ECB contacted European banks to find out their exposure to the Swiss entity
Red day the one who lived this Wednesday Credit Suisse. The entity’s shares lost up to 30% at certain times of the day on the Zurich Stock Exchange before notching a new all-time low. In the last part of the session, they managed to limit their decline below 20%. Given these numbers, the entity has already started sending a message for help. According to publish Financial Times, the entity asked the Swiss National Bank for a public demonstration of support. Moreover, some sources in the financial press suggest that he has even sought the help of Finma, the Swiss financial regulator.
On the other hand, and as reported by Reuters, the European Central Bank (ECB) contacted the banks under its supervision to find out what their exposure is. Credit Suisse. Of course, it seems that they wanted to send a message of calm, because one of the watchdog sources consulted by Reuters assures that the problems of the Swiss are specific to that entity and not systemic. In other words, they should not affect other banks in the eurozone.
Credit Suisse It is one of the first to suffer severely from the crisis that broke out on the other side of the ocean. After the fall from grace of Silicon Valley Bank (SVB), the European bank is entering several dark days on the floors of the Old Continent. and some, like Credit Suisse, with numbers that eliminate hiccups. The collapse of the Swiss took place shortly after the entity itself recognized that in its annual report there were significant material weaknesses in the results it presented in 2021 and 2022. Due to the numerous reputational scandals that the bank is involved in, it is now adding the international crisis that caused the bankruptcy of SVB . Switzerland’s second largest bank by market value has found itself in a scenario that looks set to become the worst in its 167-year history.
Credit Suisse chains of two years of millionaire losses. In 2021, it generated 1.572 million Swiss francs (1.6 billion euros), and in 2022, these figures almost quintupled to 7.4 billion euros.
Among the main factors behind these bad accounts is its exposure to risky companies that have failed in previous years, such as the American hedge fund Archegos or the Anglo-Australian financial services company Greensill.
After recognizing on Wednesday that the accounting presented for the past two years was not entirely accurate, the final straw came directly from Saudi Arabia. The Saudi National Bank, the main shareholder of the entity, announced that it would not give the Swiss any additional financial help to deal with their damaged accounts. “We can’t because we would exceed 10% (shareholding), that’s a regulatory issue,” Saudi State Bank President Ammar al Khudairy said in remarks to Bloomberg.
Source: La Vozde Galicia
I am Jason Root, author with 24 Instant News. I specialize in the Economy section, and have been writing for this sector for the past three years. My work focuses on the latest economic developments around the world and how these developments impact businesses and people’s lives. I also write about current trends in economics, business strategies and investments.
