1st LD-Writethru: Swiss central bank ready to bail out Credit Suisse as its shares plummet

  • World
  • Thursday, 16 Mar 2023

GENEVA, March 15 (Xinhua) -- As shares of Credit Suisse fell to a record low on Wednesday, the Swiss central bank said it would provide the troubled investment bank with liquidity if required.

Since Tuesday, Credit Suisse's shares have fallen continuously, slumping by more than 20 percent on Wednesday.

The bank's shares opened at 2.28 Swiss francs (2.46 U.S. dollars) per share on Wednesday morning, before falling to 1.55, and closing at an all-time low of 1.70.

Founded in 1856, Credit Suisse is the second-largest bank in Switzerland, and has an important influence on the global capital market.

Since 2021, the bank has been plagued by negative news such as investment losses. The stock price of Credit Suisse has continued to fall, and its market value has significantly declined.

In early February, Credit Suisse posted a net loss of 7.3 billion Swiss francs for 2022, while in 2021 its net loss was 1.7 billion Swiss francs.

According to the bank's 2022 annual report released on Tuesday, there was "material weakness" in internal controls over financial reporting.

Meanwhile, the Saudi National Bank, a major shareholder of Credit Suisse, said on Wednesday that it would not increase its stake in the bank.

These two events have further battered Credit Suisse's stock prices, and the collapse of Silicon Valley Bank (SVB) in the United States has seen the stock prices of European banks generally plummeting.

Later on Wednesday, the Swiss central bank, Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority FINMA, issued a statement on market uncertainty.

They said that Credit Suisse's stock exchange value, and the value of its debt securities, have been particularly affected by market reactions in recent days.

However, the two institutions said that the problems of certain banks in the U.S. do not pose a direct risk to Swiss financial markets.

"Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks. If necessary, the SNB will provide CS with liquidity," the statement said. (1 Swiss franc = 1.07 U.S. dollar)

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