Credit Suisse has experienced a loss of confidence in the financial institution’s health following a significant drop in its shares’ value this week. Over the past five days, Credit Suisse shares have fallen 24.34% against the U.S. dollar, eroding trust amid fears about the global banking system. On Wednesday at around 9 p.m. (ET), Credit Suisse announced that it was strengthening its liquidity by borrowing 50 billion Swiss francs ($54 billion) from the Swiss National Bank (SNB). As concerns about the world’s banking system continue to spread, bailout measures are starting to emerge in the U.S. and abroad.
Emergency Measures to Stabilize Global Banking System Emerge as Credit Suisse and Other Banks Face Uncertainty
Credit Suisse’s stock hit a record low on Wednesday after the Saudi National Bank declined to assist the Zürich, Switzerland-based bank. The bank’s troubles have fueled fears of bank contagion after three major U.S. banks collapsed last week. Some market strategists predict that Credit Suisse will be the next to fail, and the actual value of Credit Suisse’s share price has been called into question. After a tumultuous day on Wednesday, Swiss officials announced that they were working to stabilize the financial institution. Both the Swiss National Bank and FINMA issued statements of support.
JUST IN: Swiss National Bank will bail out Credit Suisse if needed.
— Sasha Hodder (@sashahodler) March 15, 2023
Shortly after 9 p.m. Eastern Time, Credit Suisse issued a press release announcing that it had taken “decisive action to pre-emptively strengthen liquidity.” Credit Suisse stated that it intended to exercise the bank’s option to borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a Covered Loan Facility, as well as a short-term liquidity facility, both of which would be fully collateralized by high-quality assets. The company also announced public tender offers for U.S. dollar-denominated senior debt securities and euro-denominated senior debt securities, with an expiration date of March 22, 2023, subject to terms and conditions.
“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” the bank’s CEO Ulrich Koerner said in a statement. “We thank the SNB and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler…
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