Finance & Economics

Credit Suisse to Borrow Up to $54bn from Swiss Central Bank

Credit Suisse has announced plans to take out a loan of up to 50 billion francs ($54 billion) from the Swiss central bank to strengthen its finances.

Credit Suisse to Borrow Up to $54bn from Swiss Central Bank

Source: Pixabay.com

The financial institution is currently focusing its efforts on strengthening liquidity to become a simpler bank. On Wednesday, March 15, the value of Credit Suisse shares showed a drop of 24%. This happened after the so-called weaknesses were discovered in the financial statements of the giant of the Swiss banking sector.

In European markets, the news about reporting problems provoked a sell-off in shares of the financial institution due to the fear of a global crisis.

Credit Suisse says that the borrowing measures are a demonstration of determination in strengthening its own. The bank’s executive director Ulrich Kerner says that now the primary goal is to move forward so that the financial institution transforms into a simpler representative of the banking sector and focuses on meeting the needs of customers.

After the fall in the value of Credit Suisse shares, the National Bank of Saudi Arabia, which is an investor in the Swiss bank, announced that there were no plans to inject additional funds. This position of the lender has aggravated the difficult situation in the financial markets.

Andrew Kenningham of Capital Economics says that the problems of Credit Suisse actualize the question of whether the current situation in the banking sector is a temporary state of affairs or whether it portends a large-scale crisis. Earlier it became known about the bankruptcy of financial institutions in the United States.

The Swiss National Bank and the Swiss Financial Markets Supervision Authority have declared their readiness to help Credit Suisse if necessary. Thus, these institutions tried to reduce the panic in the markets. The regulators noted that Credit Suisse complies with the stability rules that apply to systemically important banks in Switzerland.

As we have reported earlier, Regulators Close Crypto-Focused Signature Bank.

Serhii Mikhailov

2353 Posts 0 Comments

Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.