Credit Suisse raises £45,000,000,000 in emergency loans
Credit Suisse will borrow up to 50 billion Swiss francs (45 billion pounds) from the Swiss central bank as an emergency loan.
The bank’s share price fell 24% on Wednesday after it identified “material weaknesses” in its internal controls over financial reporting.
The company announced the emergency loan today to boost its liquidity and reassure investors.
Fears about the chaos sweeping the sector mounted as stock markets tumbled in the UK, Europe and the US – as Credit Suisse concerns emerged shortly after the Silicon Valley bank collapse.
London’s FTSE 100 index closed down 3.8% on Wednesday – its worst daily performance since the start of the Covid pandemic.
The Bank of England is said to have been in emergency talks with its global central bank counterparts last night as the crisis deepened.
Following the loan announcement, China’s Hang Seng Index fell nearly 2% and Japan’s Nikkei 225 fell almost 1%.
Wall Street markets began to stabilize today amid hopes that the credit lifeline for Credit Suisse will stop any worsening problems.
After the global financial crisis that followed the collapse of US investment bank Lehman Brothers in 2008, Europe strengthened its banking security by transferring supervision of the largest banks to the central bank.
The central bank is thought to be less likely to turn a blind eye to developing issues than national regulators.
Credit Suisse’s parent bank is not part of EU supervision but has branches in several European countries subject to international regulations.
Susannah Streeter, head of money and markets at UK financial services firm Hargreaves Lansdown, said the problems at Credit Suisse underscore the “lightning speed of the global fallout from the Silicon Valley bank collapse”.
She added: “This has rattled the banking sector, prompting investors to see weaknesses in other institutions and scramble to exit.
“The £45 billion bailout eases concerns about a larger run on Credit Suisse and the impact on other institutions around the world suspended from their operations.
“For now, the move has returned some stability to global markets, with the S&P 500 regaining ground as it appeared the Swiss National Bank was on hand to help. But the nerves are still on edge, and this has been shown in the trade in Asia.”
Get in touch with our news team by emailing us at firstname.lastname@example.org.
For more stories like this, Visit our news page.
Get the top news, feel-good stories, analysis and more
https://metro.co.uk/2023/03/16/credit-suisse-to-take-out-45000000000-emergency-loan-18451920/ Credit Suisse raises £45,000,000,000 in emergency loans