Credit Suisse chances to survive?

JoshWilliams · #1 15.03.2023, 18:49

What chances does CS have to survive at this stage? Will the SCB do anything (with or without any help from the FED)? I am under the impression there is a lot of speculation going on BTW.

Regards,
- Josh

ZuriRollt · #2 15.03.2023, 18:52

	Quote:	JoshWilliams
	What chances does CS have to survive at this stage? Will the SCB do anything (with or without any help from the FED)? I am under the impression there is a lot of speculation going on BTW. Regards, - Josh

What‘s the „SCB“ or the „FED“. Is it similar to the SNB and FINMA?

Biro · #3 15.03.2023, 19:06

	Quote:	ZuriRollt
	What‘s the „SCB“ or the „FED“. Is it similar to the SNB and FINMA?

He probably means SNB !!

JoshWilliams · #4 15.03.2023, 19:18

	Quote:	Biro
	He probably means SNB !!

yeah sorry SNB

ZuriRollt · #5 15.03.2023, 19:21

	Quote:	Biro
	He probably means SNB !!

Look, I‘m torn. As a former core team member on the „Too big to fail“ programme at UBS, but also enjoy EF sometimes, it‘s a toss-up between fun (or getting great ideas) and fact. Solved. I‘m still legally obligated to the terms of of my employment contract, although just retired, so can‘t comment on anything that‘s not already publicly announced (as is probably a great deal of the Swiss working force).

So I‘m more than happy to just lurk

bowlie · #6 15.03.2023, 19:28

The media hype is making a bad situation worse. Almost guaranting that the government has to step in.

The US’s decision to guarantee all of SVB’s depositors is a very bad precedent

ZuriRollt · #7 15.03.2023, 19:37

	Quote:	bowlie
	The media hype is making a bad situation worse. Almost guaranting that the government has to step in. The US’s decision to guarantee all of SVB’s depositors is a very bad precedent

Wonder if it will be enough to kick-in the "Too big to fail" rules which should ensure that the Swiss business is separated.

This includes, for example, that in an emergency, the deposit and credit business as well as payment transactions continue to function. This is to prevent the entire economy from being affected in the event of the bankruptcy of a large bank. Particularly important in a country like Switzerland.

If push comes to shove, it‘s going to be a great stress-test of the regulations now in place.

litespeed · #8 15.03.2023, 19:49

What always annoys me is how asymmetrical the ups and downs of big corporations are:

In good times, it's the C-suite and shareholders are swimming in money, and they do their best to avoid tax.

In bad times, the C-suite get a golden parachute, employees lose their jobs and the taxpayers get the bill.

As a centrist, I support capitalism so long as corporations have a social conscience. It is no wonder the middle class is vanishing. Ideally, the ExBs and BoDs need more skin in the game.

JoshWilliams · #9 15.03.2023, 19:58

	Quote:	ZuriRollt
	Wonder if it will be enough to kick-in the "Too big to fail" rules which should ensure that the Swiss business is separated. This includes, for example, that in an emergency, the deposit and credit business as well as payment transactions continue to function. This is to prevent the entire economy from being affected in the event of the bankruptcy of a large bank. Particularly important in a country like Switzerland. If push comes to shove, it‘s going to be a great stress-test of the regulations now in place.

I am confused by a day like this where massive speculation came into effect with short sellers betting against and winning big. Not entirely clear if CS actually reached a point of no-return when only an injection of cash orchestrated through the SNB will help, or if it can still get back on track with its own wings maybe with some indirect comfortable statements from SNB and FINMA.

ZuriRollt · #10 15.03.2023, 20:56

	Quote:	bowlie
	The media hype is making a bad situation worse. Almost guaranting that the government has to step in. The US’s decision to guarantee all of SVB’s depositors is a very bad precedent

Which „media hype“ would that be?

ZuriRollt · #11 15.03.2023, 21:00

Just a little update:

SNB would provide liquidity to CS.

The Swiss National Bank will provide liquidity to CS if needed. This was announced by the SNB together with the Swiss Financial Market Supervisory Authority Finma on Wednesday evening. There are also currently no indications of a direct risk of contagion for Swiss institutions due to the problems of US banks, the media release said.

The strict capital and liquidity requirements that apply to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks, it said. Finma is in very close contact with the bank and has all the information relevant for regulatory purposes.

Source:

https://www.tagesanzeiger.ch/credit-...n-179152145510

robBob · #12 15.03.2023, 21:55

	Quote:	ZuriRollt
	Look, I‘m torn. As a former core team member on the „Too big to fail“ programme at UBS, but also enjoy EF sometimes, it‘s a toss-up between fun (or getting great ideas) and fact. Solved. I‘m still legally obligated to the terms of of my employment contract, although just retired, so can‘t comment on anything that‘s not already publicly announced (as is probably a great deal of the Swiss working force). So I‘m more than happy to just lurk

Seem to be seemly active for just lurking

ZuriRollt · #13 15.03.2023, 21:57

	Quote:	robBob
	Seem to be seemly active for just lurking

You know, when you get that itch, and just have to reply, having already read other threads on the topic. Promise to shut-up now

Really.

robBob · #14 15.03.2023, 22:01

	Quote:	ZuriRollt
	You know, when you get that itch, and just have to reply, having already read other threads on the topic. Promise to shut-up now Really.

No problem. Only concerned about your contract.

Axa · #15 15.03.2023, 23:26

The limits and notice period for withdrawals or 50+K CHF are planned for times like this.

Anyway, today is just the consequence of things that started changing long time ago:

	Quote:
	Credit Suisse Clients Flee to UBS in Asia as Rich Weigh Options (November 24, 2022) Clients pulled as much as 84 billion Swiss francs ($89 billion) of their money from the bank globally during the first few weeks of the quarter, marking potentially the worst exodus since the financial crisis and contributing to an expected fourth quarter loss. The outflows were particularly pronounced at the key wealth management unit, where they amounted to 10% of assets under management. Wealthy clients were spooked by the volatile swings in the cost to insure the bank’s debt against default in early October amid speculation about how severe the restructuring would be.

https://www.swissinfo.ch/eng/bloombe...tions/48083758

So, credit default swaps (CDS) for CS. If the October 2022 increase spooked customers...the prices today are deadly

PS. what is a CDS? https://www.investopedia.com/terms/c...efaultswap.asp

marton · #16 15.03.2023, 23:46

	Quote:	ZuriRollt
	Just a little update: SNB would provide liquidity to CS. The Swiss National Bank will provide liquidity to CS if needed. This was announced by the SNB together with the Swiss Financial Market Supervisory Authority Finma on Wednesday evening. There are also currently no indications of a direct risk of contagion for Swiss institutions due to the problems of US banks, the media release said. The strict capital and liquidity requirements that apply to Swiss financial institutions ensure their stability. Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks, it said. Finma is in very close contact with the bank and has all the information relevant for regulatory purposes. Source: https://www.tagesanzeiger.ch/credit-...n-179152145510

Hopefully, Credit Suisse this week acknowledged “material weakness” in its financial reporting does not materially impact its reporting on these capital and liquidity requirements, although the timing is worrying unfortunate.

Axa · #17 15.03.2023, 23:52

Well, just a display of how rational and cool-headed is the management at Credit Suisse. Things are not going well, thus priorities have to be defined. Fix the mess? Nope, sue Inside Paradeplatz:

	Quote:
	Credit Suisse has launched a lawsuit against a popular Zurich finance blog over what it claims are unvetted and abusive comments hosted under stories about the Swiss bank since chief executive Ulrich Körner took charge. December 20, 2022

https://www.swissinfo.ch/eng/busines...-blog/48148036

Jim2007 · #18 16.03.2023, 07:59

	Quote:	Axa
	Well, just a display of how rational and cool-headed is the management at Credit Suisse. Things are not going well, thus priorities have to be defined. Fix the mess? Nope, sue Inside Paradeplatz: https://www.swissinfo.ch/eng/busines...-blog/48148036

By UK standards the CS risk numbers are actually no worse than their main banks and pretty much the same for EU numbers. Stopping a potential run on the bank requires the immediate closing down of the rumor mills. Ensuring survival is the first step to fixing…..

gipfelisturmer · #19 16.03.2023, 08:03

https://finance.yahoo.com/news/credi...012622362.html

Biro · #20 16.03.2023, 08:30

	Quote:	ZuriRollt
	You know, when you get that itch, and just have to reply, having already read other threads on the topic. Promise to shut-up now Really.

Must be really itching now.....