Credit Suisse has reportedly decided to borrow USD 53.68 billion from the Swiss National Bank, under a short-term liquidity and covered loan facility. The decision has been made in an attempt to try to rejuvenate operations following a fall in shares after Saudi National Bank, its top investor, withdrew its assistance.
With the help of this fund, the bank will create a simpler and more focused financial institution, to help cater to the needs of the core businesses and clients.
CEO of Credit Suisse, Ulrich Koerner, commented that these measures are being taken to strengthen the bank during its strategic transformation to better cater to the clients and other stakeholders. He also expressed gratitude toward FINMA and SNB for their support in this transition.
Chairman of Saudi National Bank, Ammar Al Khudairy, has stated that the tension is unwarranted since there were no discussions where Credit Suisse asked for financial help. He further added that the turmoil is isolated and was created due to a little bit of panic.
Tabbush report founder, Daniel Tabbush, also shed some light on the matter of trust in the banking sector, citing restoration of trust as the obvious issue. Furthermore, he also about how the volatile market conditions may feed through to many interconnected banks which have Credit Suisse contracts.
Many other South Asian banks like The Commonwealth Bank of Australia and National Australia Bank, as well as some South Korean banks, also experienced unprecedented lows. The value of the Swiss franc against the U.S. Dollar has been mostly volatile.
U.S. futures climbed up by more than 100 points since the announcement from Credit Suisse. The bank is also making a cash tender offer related to senior debt securities for up to USD 2.5 billion aggregate consideration.
Source Credit: https://www.cnbc.com/2023/03/16/credit-suisse-to-borrow-up-to-about-54-billion-from-swiss-national-bank.html