Credit Suisse announced late Wednesday that it will borrow up to about $54 billion from the Swiss National Bank. People walk past Credit Suisse’s New York headquarters in New York City on March 15, 2023.
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Credit Switzerland announced it will borrow up to 50 billion Swiss francs ($53.68 billion) from the Swiss National Bank under a secured loan facility and a short-term liquidity facility.
The decision comes shortly after shares of the lender fell sharply on Wednesday, hitting an all-time low for a second straight day after top investor Saudi National Bank said it will be unable to provide further assistance.
The latest steps will “support Credit Suisse’s core businesses and customers as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around customer needs,” the company said in a statement. announcement.
In addition, the bank is making a cash offer for ten US dollar-denominated senior debt securities for an aggregate amount of up to $2.5 billion – as well as a separate offer for four euro-denominated senior debt securities for an aggregate amount of up to $500. million euros, the company said.
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“These actions demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our customers and other stakeholders,” said Ulrich Koerner, CEO of Credit Suisse.
“We thank the SNB and FINMA in executing our strategic transformation. My team and I are committed to making rapid progress to deliver a simpler and more focused bank built around customer needs,” said he.
US futures rose, with the Dow Jones Industrial Average futures are up more than 100 points after the announcement. S&P 500 futures also rose 0.45% and Nasdaq 100 futures climbed 0.54%.
In the wake of the Credit Suisse saga, Tabbush Report founder Daniel Tabbush stressed that a broader concern for the banking industry is trust.
“The obvious problem is restoring confidence and stopping the deposit flight, which may have been addressed in whole or in part by the central bank,” he told CNBC’s “Street Signs Asia.”
“But what’s more difficult is not simply controlling the issues, but how this permeates across so many interconnected banks, where there are Credit Swiss contracts — where there are derivatives, where there are facilities — which is really the next order problem . ” he said.
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Banks in Asia-Pacific also recouped some earlier losses – Japan’s Topix previously tumbled more than 2% and most recently was down 1.4%.
This is the latest news. Check back later for updates.