50 billion and still no trust

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The fog has slowly cleared and the image of a busy day for the financial center is clearing. But there are still many question marks. For example, the question of how much of the CHF 50 billion loan from SNB Credit Suisse was withdrawn and how long this money will take to ease the hustle and bustle around the big Swiss bank. And whether trust, by far the most important currency for a bank, will return from customers, investors and other banks.

One thing is clear: CHF 50 billion cash injection has been caught in the stock market and investors are snatching CS shares. But initial enthusiasm quickly dissipated, with a price increase of almost 20 percent from the 33 percent spike in the first few minutes of trading to Thursday evening. At least the stock manages to stay above the CHF 2.02 mark per CS cap with a closing price of CHF 2.02.

breath for CS

For now, CS is not worried about shareholders. However, it is heard that customers continue to leave the bank and their money outflows have not been stopped yet. And only a few new customers come to the bank – if any.

Teodoro Cocca, 51, a banking professor at the University of Linz, told AWP news that CS will be quickly withdrawing money from the National Bank to deal with “possibly a substantial outflow of customer deposits”. Agency.

At least the bank seems a little relieved. Banking expert Peter V. Kunz (57) tells Blick TV: “50 billion should be enough for a while. If an emergency really arises, the Central Bank can easily increase this amount.”

Banks don’t trust CS

But Cocca addresses another problem for the bank: The banking expert says Credit Suisse is probably no longer getting enough liquidity in the market because other banks no longer trust it. And that doesn’t really seem to have healed. Insurance premiums against CS’s – the so-called CDS – credit default risk are still at dizzying levels. Ten times higher than UBS, for example.

This illustrates the bank’s still unresolved core problem: Where will future profits come from in order to meet all of the bank’s obligations? Other banks are still skeptical of the future business model of rival Credit Suisse.

A long way

That’s right: the financial injection for CS is not comparable to the bailout of UBS. First of all, it’s not because UBS is taking advantage of the rally in the post-financial crisis recovery. CS, on the other hand, has to reposition itself in much more difficult times.

The result of a tumultuous day for Credit Suisse: Investors tentatively agreed, customers remain suspicious, and creditors still don’t really trust the bank. The emergency operation was successful, but the patient is far from the path of recovery.

Source :Blick