Credit Suisse grabs lifeline: danger averted?
After the bankruptcy of the Silicon Valley Bank, the plummeting share price of Credit Suisse (CS) triggered concerns across the globe on Wednesday. The lender's shares closed down by around 24 percent at the end of trading. On Thursday night the bank announced that it would accept an offer of help from the Swiss National Bank and borrow up to 50 billion francs. Europe's press analyses the implications.
No need to panic
La Tribune de Genève has practical advice for the bank as well as for its clients:
“Swiss depositors have no reason to panic and should remain calm (their deposits up to 100,000 francs are secured). Bern has finally initiated a bailout programme with the Swiss National Bank. Credit Suisse must now accelerate its restructuring and draw up a plan for liquidating its investment bank or even selling off its main international activities while preserving the purely Swiss bank, which is still profitable. The alternative? A merger, but with whom? It is almost certain that Credit Suisse will have to change in size and nature.”
Europe is by no means immune
The incident shows that the collapse of the SVB may well have repercussions for European financial institutions, De Standaard warns:
“The immediate threat from the US did not seem worrying at first, and the markets calmed down. But speculators chose a different target yesterday: Credit Suisse. What could be more solid than a Swiss bank? Until recently the answer was: nothing. But that axiom no longer holds. True, Switzerland belongs neither to the EU nor to the Eurozone. But the idea that Europe is immune to financial shocks that take place elsewhere no longer held much of its validity yesterday.”
Its bad image has caught up with it
The adjective Suisse no longer stands for seriousness, La Repubblica concludes:
“Whether it's due to the proverbial Swiss discretion or - as the Swiss Broadcasting Corporation complains on its website - this is an 'international bank that lost touch with its Swiss roots', what is certain is that this credit institution, despite or precisely because it is 'Suisse', has been attracting too many clients with a dark past or present for some years. ... Thus a first-class bank has become a bad boy of the international financial world, caught up in every scandal. ... A safe haven for oligarchs and dictators, a serial investor in the worst deals on both sides of the Atlantic and sometimes even the Pacific, an inexhaustible source of material for fans of the Panama Papers and the like.”
Credibility gone
ABC predicts that distrust of banks will grow:
“Credit Suisse's problems are not comparable to the banking panic triggered by Silicon Valley Bank (SVB), but they are fuelling distrust of the global financial sector. ... This is a classic example of the 'butterfly effect': the Swiss bank's bad situation was part of the global landscape until a financial institution that resembles it in no way structurally, the SVB, went bankrupt. ... The Swiss National Bank's promises are insufficient because Credit Suisse was already struggling in a sea without turbulence. Now it's adrift in a storm without a shred of credibility.”
Too big to fail
The crisis at Credit Suisse is entirely homemade, Handelsblatt insists:
“The turbulence is due to a toxic mixture of chronic control weaknesses, sloppy risk management and a faulty strategy. But that doesn't make this situation any less dangerous. For the Swiss institution clearly falls into the category of banks that are 'too big to fail'. These institutions are so big and, above all, so closely intertwined with the rest of the financial world that they simply cannot be allowed to collapse.”