Credit Suisse Shares Crash, Bank Borrows Over $50 Billion
Shares in the bank plummeted by 30% on Wednesday.
By Steve Huff •
On Thursday, Credit Suisse announced measures to bolster its liquidity by securing up to $54 billion from Swiss National Bank. The decision followed a steep 30% drop in the bank's shares, increasing concerns about the banking sector's deposit crisis. Regulators and financial leaders temporarily stabilized markets following the collapse of Silicon Valley Bank (SVB) last week, but renewed worries about Credit Suisse reignited anxiety.
In a statement, Credit Suisse said the additional liquidity would support its "core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs."
Along with the loan from Swiss National Bank, Credit Suisse said it had bought back a large amount of its debt to manage liabilities and expenses better.
Once a major player on Wall Street, Credit Suisse has experienced compliance failures and other missteps, damaging its reputation with clients and investors. The bank launched a "radical" plan to revamp its operations in October, including cutting 9,000 full-time jobs, spinning off its investment bank, and focusing on wealth management. CNN reports that analysts predict the lender may require additional funds to absorb potential losses in 2023.
Despite the market turmoil caused by the collapse of SVB and Signature Bank in the US, Credit Suisse CEO Ulrich Krner reported that the bank experienced "material good inflows" of money on Monday.
