On the Brink of a New Trend: Credit Suisse Receives 50 Billion Swiss Franc Bailout From Swiss National Bank

Credit Suisse has seen its shares fall sharply in value this week, eroding confidence in the health of the financial institution. Over the past five days, Credit Suisse’s stock has fallen 24.34% against the U.S. dollar, undermining confidence amid concerns about the global banking system. At around 9 p.m. ET Wednesday, Credit Suisse announced that it would borrow 50 billion Swiss francs ($54 billion) from the Swiss National Bank (SNB) to bolster liquidity. As concerns about the global banking system continue to grow, bailouts are beginning to emerge both in the U.S. and abroad.

Emergency measures to stabilize the global banking system emerged

as Credit Suisse and other banks faced uncertainty.

Credit Suisse’sshare pricehit a record low on Wednesday after the National Bank of Saudi Arabia declined to support the Zurich, Switzerland-based bank. Credit Suisse’s problems fueled fears of a banking contagion after the collapse of three major U.S. banks last week. Some market strategists are predicting that Credit Suisse will be the next to fail, and the actual value of Credit Suisse’s stock price has been called into question. After a tumultuous day on Wednesday, Swiss authorities announced that they are working to stabilize the financial institution. Both the Swiss National Bank and FINMA issuedstatements of support

JUST IN: Swiss National Bank will bail out Credit Suisse if necessary.

– Sasha Hodder (@sashahodler) . March 15, 2023

Shortly after 9 p.m. Eastern Time, Credit Suisse issued apress releaseannouncing that it had taken “decisive action to preemptively enhance liquidity.” Credit Suisse stated that it intends to exercise the bank’s option to borrow from the Swiss National Bank (SNB) a covered loan facility of up to CHF 50 billion and a short-term liquidity facility (both fully collateralized by prime assets). The bank also announced that it will conditionally make a tender offer for its U.S. dollar-denominated and euro-denominated senior debt securities, with a deadline of March 22, 2023.

“These actions demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our customers and other stakeholders,” the bank’s CEO Ulrich Koerner said in a statement. ‘We thank SNB and FINMA for their help in executing our strategic transformation. My team and I are determined to move forward quickly to deliver a simpler, more focused bank built around the needs of our customers.”

Credit Suisse will receive a $54,700,000,000 bailout.
This is more than the GDP of most countries in the world and should be able to continue for a few more days.

– David Kurten (@davidkurten) . Mar 16, 2023

About SNB