Can I have my money? What about the mortgage?

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The Swiss financial center has been on fire for 48 hours. In Federal Bern, crisis meetings are chasing each other. The Federal Council, the National Bank, the Financial Markets Authority (Finma) and the heads of two major banks are trying to find a solution to save the badly affected major bank Credit Suisse. Around 1930, the Federal Council reported that it was taken over by UBS. However, many questions remain unanswered.

Because Switzerland was sleeping. For too long, people in this country have relied on the CS board’s statements that they have the matter under control and that the transformation is proceeding as planned. What was totally ignored: Many shareholders and customers have already decided to turn their backs on sick CS. This has caught the attention of regulators in Europe and the US for the past few days. They instructed their bank to at least restrict their business with CS. The pressure on Switzerland to find a solution by 1 am on Monday morning is enormous. Around this time, the first stock markets are opening in Asia. Without a solution for CS, the global banking earthquake threatens to continue.

Even if a solution is reached at the last minute, it seems that CS shares will not be traded on Monday. The Bank may request that the trading of its securities be stopped. This will be a precautionary measure to prevent the massive sale of CS shares for now. Only when it becomes clear who pays how much for CS can a realistic price be found on the exchange. Normally, the price of the shares should equal the takeover price. If necessary, a stock can be suspended from trading for weeks. One thing is clear: long-term shareholders, in particular, are among the biggest losers in the CS debacle.

By Monday morning, many CS employees worried about their jobs will be busy moving their clients’ money to another bank. In the last few days, it is said that up to 10 billion francs of client funds have flowed from CS every day. This means that the 50 billion cash injection from the Central Bank may soon run out. On the other hand, customer deposits are secured by the liquidity of the bank. As of now CS has a big trust issue, but no liquidity issue yet. This can only happen when customers rush to the box office en masse on Monday and want to withdraw their money. But there is no reason for this: amounts up to CHF 100,000 are covered by deposit insurance.

The purpose of the fire brigade’s drill to rescue CS is so that the bank can continue to operate normally on Monday. Therefore, it can be assumed that all payments such as rent, wages or insurance premiums will continue to be made. In addition, payment transactions are considered systematically important, this function of CS should always work properly.

Nothing will change in terms of mortgage debt. After all, whoever is in charge of CS in the future will be happy to take on well-collateralized mortgages from Swiss clients. The interest is then owed to another bank – UBS as it is now.

Source :Blick