The Swiss National Bank (SNB) said on Wednesday that if necessary, it will provide liquidity to Credit Suissebut assured that this bank meets the strict liquidity and capital requirements that are required of all Swiss financial institutions to guarantee their stability.
The Credit Suisse bank experienced its blackest trading day on Wednesday, losing a quarter of its value on the stock market and dropping its shares to a historically low level, below 2 Swiss francs, something never seen in its 167-year history.
The bank – hard hit by the mistrust in its management and in the banking system in general after the bankruptcy of three banks in the United States in a week– asked the SNB and the Swiss Financial Market Supervisory Authority (FINMA) to make a firm statement of support to calm the markets.
Both institutions issued a joint statement stating that Despite the problems in the financial sector in the United States, “there are no indications that point to a risk of contagion for Swiss entities.”
“Regulations in Switzerland require that all banks maintain a capital and liquidity margin that equals or exceeds the minimum requirements of the Basel standards,” which are international measures to quantify bank risks in a comparable way.
Systemically important banks have to meet even higher criteria, “which allows the negative effects of larger crises to be absorbed,” they said.
Credit Suisse scandals in recent years
On top of all this, Credit Suisse was already undergoing a deep restructuring after a series of scandals they will leave him as a “weak link” in the banking network in Switzerland.
-The bankruptcy of the financial firm Greensill in 2021 – a British company that used complex financial arrangements to lend money to companies to pay their bills – had a direct impact on the bank’s asset management arm as it had invested some $10 billion there, through four funds.
– Just four weeks later, the American fund Archegos found itself unable to continue with its injections of money in order to cover its investments in derivatives. This triggered a massive sell-off on Wall Street that affected large banks, with Credit Suisse being the worst hit, with losses of $5 billion.
-In October 2021, the Swiss bank was involved in a corruption scandal in Mozambique related to loans to state-owned companies dating from between 2013 and 2016. The money should have gone to finance maritime surveillance projects, fishing and shipyards but was instead diverted for bribes.
-The local environment click revealed in December 2021 that the president of the Bank, Antonio Horta-Osorio, had violated the restrictions on movement and the Isolation rules imposed by the coronavirus pandemic.
-In February 2022, the Organized Crime and Corruption Reporting Project (OCCRP), a consortium of 47 media outlets that includes the world and The New York Timespublished an investigation -in which Infobae participated- known as Swiss Secrets in which they revealed that the bank housed funds from clients involved in criminal and corruption cases.
-A month later, in March 2022, a court in Bermuda confirmed that former Georgian Prime Minister Bidzina Ivanishvili had lost investments managed by former Credit Suisse banker Patrice Lescaudron. Lescaudron had been fired from the entity in 2015 and convicted three years later for fraud in Geneva. Finally, he committed suicide two years later, in 2020.
-One of the criminal cases in which Credit Suisse was involved was the one that involved the money laundering linked to a Bulgarian cocaine network.
-In October 2022, Credit Suisse settled a litigation that he had open in the United States, dating back to the 2008 financial crisis, relating to mortgage-backed securities.
Keep reading:
The scandals in which the Credit Suisse bank was involved in recent years
After the collapse of Silicon Valley Bank, the market is now looking at the Swiss bank Credit Suisse
Credit Suisse, Silicon Valley Bank and investor fear: 5 keys to understanding the banking problems that are shaking the markets
Credit Suisse stock collapsed 25% and fears for the banking sector now focus on Europe
Credit Suisse’s largest shareholder sold its entire stake
Source-www.infobae.com