Credit Suisse borrows over $50B from Swiss National Bank after shares crash by nearly one-third
Brady Knox
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Credit Suisse borrowed over $50 billion from the Swiss National Bank after its shares tanked by nearly 30%.
The banking powerhouse borrowed the equivalent of $53.7 billion in a loan described by the bank as “decisive action to pre-emptively strengthen its liquidity,” CNN reported.
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Credit Suisse, Switzerland’s second-biggest bank, accepted the offer from the country’s central bank just hours after it was made. The move sparked fear that the bank would run out of money. Investors cratered Credit Suisse’s stocks Wednesday.
“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs,” the bank said in a statement.
Credit Suisse’s crisis came soon after the failure of the United States’s Silicon Valley Bank. Though not directly linked, the hit in the Swiss bank’s stocks was amplified by investor fears resulting from the banking failure across the Atlantic.
Credit Suisse has faced a crisis in recent years due to several scandals but faced perhaps its biggest challenge yet on Wednesday. The catalyst was a televised interview with Ammar al Khudairy, the head of the bank’s biggest shareholder, the Saudi National Bank, according to the New York Times. In the interview, he announced that the bank would not give Credit Suisse any more money.
The consequences of Wednesday’s plummet could have global repercussions.
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“[Credit Suisse] is much more globally interconnected, with multiple subsidiaries outside Switzerland including in the US,” Andrew Kenningham, chief Europe economist at Capital Economics, told CNN. “Credit Suisse is not just a Swiss problem but a global one.”
Credit Suisse is estimated to have roughly $573 billion in total assets.