Continue with the conversation into the crisis are now gripping everyone's
attention here at the statement out of Swiss regulators just a little while
ago, basically about the potential, if necessary.
The key quote there to provide liquidity backstop to Credit Suisse.
Sally Bakewell joining us right now. She leads Bloomberg's US finance
coverage here to talk, of course, about the second largest Swiss bank.
But let's start on the broad strokes here, because we're talking about a
statement by the main regulators over there in Switzerland saying that based
on Basel requirements, Credit Suisse meets those minimum requirements in a
Credit Suisse needs liquidity. They're there to provide it.
Yes, I think this comes amid a really bad sentiment for banking at the moment.
Don't forget, we've had the collapse of three banks and of course, 12 for
completely different reasons and very sort of isolated and particular to those
banks. The sentiment has probably taken a bit
of a hit because of this. And Credit Suisse, it's been struggling
for a long time. It's been hit by scandals, by leadership
changes, by huge losses, and then exacerbating all
of that, just as it's trying to turn itself around.
Its biggest shareholder says that it is not interested in increasing its stake.
So now the big question is, how big is the damage potentially from Credit
Suisse continuing to go down this path of
erosion? And you've been reporting Bloomberg has
been reporting that a lot of the big U.S.
banks have known about this and have been making moves to protect themselves
here. That's right.
It's possibly a positive sign that some of the biggest banks, like JP Morgan
City and Bank of America, they've all kind of been whittling down their
exposure, the direct exposure to Credit Suisse over recent months.
You know, we saw the shares plummet to a record low.
We sort of saw some of its bonds kind of signal the most distress levels.
But again, it's sort of the big question of how much is sentiment and how much is
really a key serious issue, given that we now know the SNB says it will provide
a backstop if needed. So I think the next few hours and how
the bank responds and what it comes out and says will be key.
We already saw some headlines this morning with the CEO saying, you know,
the liquidity is strong and that the bank is still on solid ground.