The collapse of the US bank Silicon Valley Bank (SVB) and the chain reaction it could generate highlights the serious situation that the European giant Credit Suisse is going through. For several months, Credit Suisse has been immersed in a crisis that does not seem to have a short-term solution and could be exacerbated by the recent loss of confidence in financial institutions attached to the US dollar.
The annual report of the Swiss bank, whose influence is enormous, hints that the situation is serious as it suffers a constant flight of clients, a trickle of blood for which it has been unable to find a tourniquet.
According to The Economist, Credit Suisse closed its trading day on the Zurich stock exchange with heavy losses of 9.58%, dragged down (like the rest of the banking sector) by the closure of the US bank after reaching its historic low several times throughout the day. On Tuesday, March 14, the shares fell 5% to 2.14 Swiss francs.
• In the past six months, Credit Suisse shares have lost more than 55%.
• It began to suffer deposit withdrawals in the fourth quarter of 2022.
• The bank has had to partially use its liquidity buffers.
• It has been unable to reverse this situation.
• Customer attrition is reaching record levels, and this trend does not look like it will reverse anytime soon.
• In November, the bank announced outflows of around 84 billion Swiss francs (over $90 billion) in the core wealth management business after the social media storm over the bank’s financial health scared many customers.
• Investors are less and less confident in the survival of Credit Suisse.
The recent collapse of SVB was followed by the smaller Signature Bank and US President Joe Biden’s unexpected address in an attempt to maintain confidence in the stability of the US system. These events have moved many investors back to cryptocurrency markets, where the price of Bitcoin has increased by almost 20% due to the high demand.
(Misión Verdad) with Orinoco Tribune content
Translation: Orinoco Tribune
Misión Verdad is a Venezuelan investigative journalism website with a socialist perspective in defense of the Bolivarian Revolution
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