In view of a price slump and great uncertainty about Crédit Suisse, the Swiss National Bank (SNB) wants to make liquidity available to the financial institution if necessary. The central bank announced this on Wednesday evening together with the Swiss financial market supervisory authority Finma. There is currently no evidence of a direct risk of contagion for Swiss institutions due to the problems of US banks, it said.
Credit Suisse, which is struggling with a deep crisis of confidence, says it only makes use of the option described hours after the commitment. As the news agencies Reuters and AFP report, the money house wants to raise up to 50 billion Swiss francs (equivalent to 54 billion dollars) from the Swiss National Bank. With the move, Credit Suisse is the first global systemically important bank since the financial crisis to receive a customized lifeline.
The bank also asked to reassure bank customers. It is a "very well capitalized bank," emphasized the head of Crédit Suisse Switzerland, André Helfenstein, in an interview with the Swiss broadcaster "Blick TV". Of course, one is not satisfied with the share price, said Helfenstein. However, this has nothing to do with the security of customer deposits. The price slump is due to the fact that the bank stocks are under pressure because of the problems of US regional banks.
The collapse of several regional US banks recently triggered uncertainty in the banking sector. This was particularly evident on Wednesday at Crédit Suisse, which was already ailing. The bank's shares fell in Zurich by more than 30 percent at times to a record low of 1.56 francs (1.59 euros) and closed at the end of trading with a decline of more than 24 percent.
In an interview with Bloomberg TV, the chairman of the Saudi National Bank, Ammar Abdul Wahed Al Khudairy, categorically ruled out additional support on request. The bank is a major shareholder in Crédit Suisse, which last year reported a loss of 7.3 billion Swiss francs and massive withdrawals from client assets of 123 billion.
The Swiss business of Crédit Suisse, which he manages, is well positioned and working well, said Helfenstein. The bank now wants to be close to the customers and also consistently continue the restructuring of the bank. Crédit Suisse is one of the 30 banks in the world that are classified as “too big to fail” because their failure would have a devastating impact on the global economy. In two years, the house will be a different bank than it is today, it will be more stable and concentrate on Switzerland and the wealth management business, said Helfenstein. However, because of the restructuring and the “challenging financial year 2022”, the big bank is in sight with a loss in the billions, said Helfenstein. "It's more restless around us."
The uncertainty also pushed other bank stocks into the red on Wednesday. The industry index Stoxx Europe 600 Banks fell by 6.9 percent. In Germany, Commerzbank shares slipped by 8.7 percent, Deutsche Bank papers lost 9.3 percent at the end of the Dax.
With regard to the uncertainty in the banking sector, Federal Finance Minister Christian Lindner emphasized the stability of the German credit system. "The federal government is in constant and intensive exchange with everyone involved," said the FDP chairman on Wednesday evening on the ARD program "Maischberger". “With the Bafin, we have an efficient financial supervisory authority, and we have the Bundesbank, which also has a tradition of stability policy. We can therefore say very clearly: the German credit system – private banks, savings banks, cooperative institutes – is stable. And we will continue to ensure that.”
France's Prime Minister Élisabeth Borne sees Switzerland's turn in the case of Crédit Suisse. “This issue falls within the remit of the Swiss authorities. They have to regulate it," said Borne on Wednesday in the Senate in Paris - even before the SNB promised help if necessary. The problems at Crédit Suisse have been known for a long time, the bank does not belong to the euro zone and is therefore not subject to European banking supervision.
France's Finance Minister Bruno Le Maire will contact his Swiss counterpart in the next few hours, said Borne. French banks such as Société Générale, BNP Paribas and Crédit Agricole are also affected by the downward trend in the banking sector.
As Finance Minister Le Maire said the day before, the French banks are not exposed to any risk from the collapse of the Silicon Valley Bank in the USA, said Borne. "As you can see, we are very cautious, but the situation is very different from what we experienced in 2008, since then numerous precautionary measures have been taken for all banks in the euro zone."