How close is Credit Suisse to the abyss?

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This has never happened before: Credit Suisse shares fell below 2 francs for the first time on Wednesday – meanwhile, CS slipped as much as 29 percent into the red. Creditors lost faith in the big Swiss bank. Investors reallocate their assets and withdraw them from CS. French Prime Minister Elisabeth Borne urges Swiss authorities to resolve CS’ problems.

Many small savers are now wondering how long this will last and whether their money is still in safe hands with CS. Blick has the answers to your burning questions.

The banking quake in the US is shifting to Europe, with Credit Suisse as its epicenter. Investors and creditors have lost their trust in the bank, so shareholders flee in droves and credit default insurance prices soar. In addition, the largest shareholder, the Saudi National Bank, reiterated that it will not inject any more money.

Theoretically, it’s over at zero francs. But the bank wants to pay shareholders a dividend of 5 cents per share, so that’s at least what the stock is worth until the dividend is paid. But it can be assumed that the stock price will bottom out sooner – either the government intervenes or investors stock up cheaply. Perhaps in hopes of a takeover.

The bank pays the bill as it takes too much time with the restructuring. Former CEO Thomas Gottstein (59) has already talked about transition and transformation, now it takes until 2025 for the bank to become profitable again, according to new management. This is taking too long for many customers and shareholders – primarily due to uncertainty in the markets and the financial sector.

NO. The bank has a sufficiently large capital base compared to other banks. The problem is more psychological, the panic in the markets does not spread to the customers of the bank.

Nobody knows this for sure. The problem is all the rumors and speculation. The important thing now is to restore trust in the bank. This will likely no longer be possible without strong communicative or financial guarantees from the government. According to unconfirmed reports, the bank is said to have already requested this. It wouldn’t be surprising if the National Bank or Finma steps up in the next few days.

NO! The money in the bank account is covered by a deposit guarantee of up to CHF 100,000. In addition, the bank has sufficient capital to cover larger amounts. In addition, all securities in client custody accounts are owned by the private fund and will be protected even if the bank goes bankrupt.

If customers panic and suddenly many of them withdraw their money at the same time, that’s a bank run. But right now there is no reason for that.

It’s a very difficult task. By trying to talk to customers and by showing that their money is in safe hands with the bank after all. Because apparently even special conditions are not enough to retain all customers. It’s getting harder and harder to find new customers willing to bring their money to CS.

Source :Blick