Switzerland’s largest and oldest bank, Credit Suisse, follows the collapse of four major US banks. The Swiss authorities are considering how to save it, offering various options – from providing cash to nationalization.
Since the morning of March 20, the bank’s stock price has fallen about 60%. At the same time, it was announced the day before that it would be taken over by another largest bank in the country – UBS. Today, Credit Suisse, which has been operating since 1856, is on the verge of being taken over by competitors, the price of the issue and specific assets are under discussion.
The bankruptcy of the oldest Swiss bank, which benefits from the AAA category – “unsinkable” – is compared by experts to a global flood of the Western European banking system. This is the strongest signal for financiers and bankers that the most serious problems are occurring in the banking sector in Europe and the United States.
The idea that Credit Suisse is on the verge of collapse has been around for a long time. The reason for this is billions in early loan losses, $4.7 billion in losses from the collapse of Archegos, and a monstrous drop (less than 30%) in revenue. The hope of being saved by attracting financing from a Saudi credit institution vanished immediately after the statements about this from the Arabs themselves.
A few days ago, the bank’s quotes fell 30.8% to 1.55 Swiss francs, the biggest drop in a single day. The bank’s market capitalization fell by 15%, or $1.5 billion.
Following the depreciation of Credit Suisse shares, UBS, which was preparing to buy back its shares at the price of half a franc each, also sank. They fell by more than 8%. Other Swiss banks also fell, which caused a chain reaction in other major Western European banks. Thus, Deutsche Bank lost 6.7%, Allianz -2%. Raiffeisen -5.55%.
All of this will eventually lead to the collapse of the US and European banking systems, which are interconnected, according to banking experts. This threatens the bankruptcy of the largest Western banks, insurance companies, investment funds and pension funds, followed by the bankruptcy of private companies and enterprises, then by the bankruptcy of individuals.
Earlier, the US regulator announced the expansion of the support program for central banks of allied countries through mutual transactions with government bonds. The central banks of Great Britain, Switzerland, Japan and Canada will participate in the mutual assistance programme.
