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Credit Suisse collapse rumours

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Lots of speculation that the ECB is going to continue hiking 50bps as planned, despite the credit suisse collapse rumours.

If true, looks like the strategy will be to put out fires and continue to hike into a recession.

Meanwhile, ECB to the rescue as CS takes out a 50 billion franc loan

finance.yahoo.com

Credit Suisse intends to borrow up to 50 billion Swiss francs from Swiss National Bank

The planned move came after Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unprecedented move by a central bank after the flagship Swiss lender's shares fell by as much as 30% on Wednesday. "Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity...
finance.yahoo.com finance.yahoo.com
 
waterbottle said:
Lots of speculation that the ECB is going to continue hiking 50bps as planned, despite the credit suisse collapse rumours.

If true, looks like the strategy will be to put out fires and continue to hike into a recession.

Meanwhile, ECB to the rescue as CS takes out a 50 billion franc loan

finance.yahoo.com

Credit Suisse intends to borrow up to 50 billion Swiss francs from Swiss National Bank

The planned move came after Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unprecedented move by a central bank after the flagship Swiss lender's shares fell by as much as 30% on Wednesday. "Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity...
finance.yahoo.com finance.yahoo.com
Click to expand...
that Yahoo article belonged in the humor section OOSPS !! ( ASF doesn't seem to have a humor section )

maybe we should start a com. on which 'too big to fail ' bank will fail ( undergo a forced restructure )

early favourites must be CS and DB , because the ECB will stall on helping the Italian banks , although forced restructures in Spain must be considered as well
 
UBS Group is in discussions to take over all or part of Credit Suisse, the Financial Times reported, after an emergency funding lifeline failed to restore investor confidence in the smaller Swiss bank.

The boards of Switzerland’s two biggest lenders are set to meet separately over the weekend to discuss a deal, the FT said, citing multiple people briefed on the talks
 
ABC explores the proposed UBS takeover of Credit Suisse. If it doesn't get over the line stock markets are going to be very nervous this week.:(

www.abc.net.au

Switzerland's largest bank in talks to save Credit Suisse

Credit Suisse is in advanced talks with its larger Swiss rival UBS about a deal to salvage Switzerland's second-biggest bank, in a bid to reassure investors before the markets open next week.
www.abc.net.au www.abc.net.au
 
I find the whole thing absolutely amazing. Swiss banks have been at the pinnacle of stability and conservatism ( as far as I know ), and the Swiss economy one of the strongest in the world.
A Swiss bank falling over !!!!!!!???????? Never !!!!
Very interesting times indeed.
Cheers
J
 
henrietta said:
I find the whole thing absolutely amazing. Swiss banks have been at the pinnacle of stability and conservatism ( as far as I know ), and the Swiss economy one of the strongest in the world.
A Swiss bank falling over !!!!!!!???????? Never !!!!
Very interesting times indeed.
Cheers
J
Click to expand...
stability or was that immunity from international repercussions ??

actually the Swiss move to being more friendly to the EU and away from being 'strictly neutral ' ( and secret )

was probably the death blow and happened a while back ( not recently )

maybe we are watching the decline of Switzerland as well
 
waterbottle said:
A whole bank for 2 billion.
Click to expand...
The Swiss bank UBS is paying 3 billion Swiss francs ($4.5 billion) for its rival in an all-share deal that includes extensive government guarantees and liquidity provisions.

The price is less than half the 7.4 billion francs Credit Suisse was worth at the close of trading on Friday.

The Swiss National Bank is offering a 100 billion-franc liquidity assistance to UBS while the government is granting a 9 billion-franc guarantee for potential losses from assets UBS is taking over. Regulator Finma said about 16 billion francs of Credit Suisse bonds will become worthless to ensure private investors help shoulder the costs.

.... - but will this end the crisis? Unhappy bondholders in there!
 
Someone has to lose.

CBers have now acknowledged that there's a liquidity crisis. They've increased the frequency of swaps as a result.
 
Dona Ferentes said:
The Swiss bank UBS is paying 3 billion Swiss francs ($4.5 billion) for its rival in an all-share deal that includes extensive government guarantees and liquidity provisions.

The price is less than half the 7.4 billion francs Credit Suisse was worth at the close of trading on Friday.

The Swiss National Bank is offering a 100 billion-franc liquidity assistance to UBS while the government is granting a 9 billion-franc guarantee for potential losses from assets UBS is taking over. Regulator Finma said about 16 billion francs of Credit Suisse bonds will become worthless to ensure private investors help shoulder the costs.

.... - but will this end the crisis? Unhappy bondholders in there!
Click to expand...

It won't hurt, much.

UBS agrees to buy Credit Suisse for $US3bn

UBS Group agreed to take over its longtime rival Credit Suisse Group for more than $US3bn ($A4bn), pushed into the biggest banking deal in years by regulators eager to halt a dangerous decline in confidence in the global banking system.

The deal between the twin pillars of Swiss finance is the first megamerger of systemically important global banks since the 2008 financial crisis when institutions across the banking landscape were carved up and matched with rivals, often at the behest of regulators.

The Swiss government said it would provide more than $US9bn to backstop some losses that UBS may incur by taking over Credit Suisse. The Swiss National Bank also provided more than $US100bn of liquidity to UBS to help facilitate the deal.

At a press conference, Swiss president Alain Berset confirmed the deal had been reached. The deal was the “best solution” to restore confidence, Mr Berset told reporters.

Swiss authorities were under pressure to make the deal happen before Asian markets opened for the week. They had to walk a fine line, needing to get the two banks’ boards to agree to the deal and avoiding the alternative, a regulator-led winddown of Credit Suisse, which could have proven more protracted and painful for the financial system.

The urgency on the part of regulators was prompted by an increasingly dire outlook at Credit Suisse, according to one of the people familiar with the matter. The bank faced as much as $US10bn in customer outflows a day last week, this person said.

The sudden collapse of Silicon Valley Bank earlier this month prompted investors globally to scour for weak spots in the financial system. Credit Suisse was already first on many lists of troubled institutions, weakened by years of self-inflicted scandals and trading losses.

Its stock price and bonds in free fall, Credit Suisse took a $US54bn lifeline from the Swiss National Bank last Thursday, which bought it enough time to enter the weekend intact.

But Swiss officials, along with regulators in the US, UK and European Union, who all oversee parts of the bank, feared it would become insolvent this week if not dealt with, and they were concerned crumbling confidence could spread to other banks.

Finma, Switzerland’s financial regulator, said Credit Suisse experienced a “crisis of confidence.” It added that there was “a risk of the bank becoming illiquid, even if it remained solvent, and it was necessary for the authorities to take action in order to prevent serious damage to the Swiss and international financial markets.” Finma said that operations of the banks would open normally on Monday “with no restrictions or interruptions.”

An end to Credit Suisse’s nearly 167-year run marks one of the most significant moments in the banking world since the last financial crisis. It also represents a new global dimension of damage from a banking storm started with the sudden collapse of Silicon Valley Bank earlier this month.

Unlike Silicon Valley Bank, whose business was concentrated in a single geographic area and industry, Credit Suisse is a global player despite recent efforts to reduce its sprawl and curb riskier activities such as lending to hedge funds.

Credit Suisse had a half-trillion-dollar balance sheet and around 50,000 employees at the end of 2022, including more than 16,000 in Switzerland. It has investment banking units in cities including New York, London and Singapore, an operations hub near Raleigh, North Caroline and employs thousands in technology in India and Poland.

UBS has around 74,000 employees globally. It has a balance sheet roughly twice as large, at $US1.1 trillion in total assets. After swallowing Credit Suisse, UBS’s balance sheet will rival Goldman Sachs Group and Deutsche Bank in asset size.

Like UBS, Credit Suisse is one of the leading managers of money for the global elite. It was consistently ranked among the top 10 in investment banks until the past year. It stumbled badly after the 2021 collapses of two key clients, Greensill Capital and Archegos Capital Management.

Credit Suisse is advised by Centerview Partners. UBS’s financial advisers are JPMorgan Chase & Co and Morgan Stanley.

The Wall Street Journal
Click to expand...
 
Swiss regulators must know something that the rest of us don't, because on Friday CSGN was trading at a market cap of 8 billion CHF for 40 billion CHF in tangible common equity and they seem to be forcing this deal through at 3 billion CHF after wiping out 16 billion in CSGN convertibles (instead of, you know, converting them down the capital stack)...complete evisceration.
 
To maintain confidence in the global banking system.

One of the most significant aspects is the decision by the Swiss regulator to totally wipe out the value of $US17 billion Credit Suisse’s Additional Tier I hybrid securities.

It is the first live application of the so-called too big to fail regime since the global financial crisis, as capital providers are being forced to contribute to a recapitalisation.

But the total loss for hybrid holders, who have fared even worse than lower ranking equity holders, could have widespread ramifications in already skittish fixed income markets.

(CS shareholders get one UBS share for every 22.48 shares they held)

In fact, one of the first questions in the hastily arranged conference call was whether UBS could be sued for treating Credit Suisse shareholders better than hybrid holders (to which the response was that this was entirely the call of regulators).
 
Dona Ferentes said:
To maintain confidence in the global banking system.

One of the most significant aspects is the decision by the Swiss regulator to totally wipe out the value of $US17 billion Credit Suisse’s Additional Tier I hybrid securities.

It is the first live application of the so-called too big to fail regime since the global financial crisis, as capital providers are being forced to contribute to a recapitalisation.

But the total loss for hybrid holders, who have fared even worse than lower ranking equity holders, could have widespread ramifications in already skittish fixed income markets.

(CS shareholders get one UBS share for every 22.48 shares they held)

In fact, one of the first questions in the hastily arranged conference call was whether UBS could be sued for treating Credit Suisse shareholders better than hybrid holders (to which the response was that this was entirely the call of regulators).
Click to expand...
am not sure i should feel pleased with myself for not replacing my redeemed bank hybrids after 2016 ( or just relieved )

this will certainly cause some recalculations in investing strategies
 
InsvestoBoy said:
Swiss regulators must know something that the rest of us don't, because on Friday CSGN was trading at a market cap of 8 billion CHF for 40 billion CHF in tangible common equity and they seem to be forcing this deal through at 3 billion CHF after wiping out 16 billion in CSGN convertibles (instead of, you know, converting them down the capital stack)...complete evisceration.
Click to expand...

And then UBS took a look and said hell no, not without govt. support
 

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