Switzerland's central bank offered to provide help to Credit Suisse “if necessary.”
Shares
in Credit Suisse plunged on Wednesday after investors dumped stock due
to fears that the embattled lender would run out of money.
- Ammar al-Khudairy, the chairman of the Saudi National Bank, said on Wednesday that the institution would not offer Credit Suisse more money.
- Saudi
National Bank is the Swiss lender's largest shareholder
and al-Khudairy's statement triggered a major sell-off of Credit Suisse
shares.
- Share prices fell by 24% on Wednesday while the cost
of insuring against a potential default of Credit Suisse rose to record
highs.
- Swiss National Bank, the country's central bank, said
after the close of trading on Wednesday that it would support Credit
Suisse “if necessary.”
- Credit Suisse said on Thursday that it may borrow up to $54B from the Swiss National Bank to improve its liquidity.
Zoom Out:
- Credit Suisse has
been accused of crimes and irregularities such as money laundering and
breaking international sanctions. In February 2022, it became the first major bank to face a criminal trial in Switzerland.
- Credit Suisse's self-caused stock rout may have been exacerbated by market anxiety surrounding the recent failures of Silicon Valley Bank (SVB) and Signature Bank in the U.S.
- Unlike SVB, Credit Suisse is viewed as a "systemically important" component of Switzerland's financial system.
