Suisse to borrow $54 billion from Swiss National Bank amid U.S. crises
To allay worries about its financial stability amid the ongoing stock market crisis, Credit Suisse announced that it would borrow up to $54 billion from the Swiss National Bank.
The New York Times reported that the bank would borrow about $50 to $54 billion.
Credit Suisse is fighting for its existence after stockholders sold their holdings out of fear that the bank would fail, raising the cost of default insurance on its debt.
Peoples Gazette on Wednesday reported that Credit Suisse, which has fought for years to turn around its fortunes, witnessed the most dramatic drop when the global stock market fell on Wednesday, with its shares losing more than 30 per cent and hitting yet another record low.
While Credit Suisse struggles with its most recent turnaround plan, the bank’s largest shareholder, Saudi National Bank, announced on Wednesday that it would not commit any additional funds to the company.
The loan bailout is an attempt to save the bank from another collapse.
The bank further stated that it would buy back up to 3 billion Swiss francs in debt.
On Wednesday, anxiety over potential threats to the U.S. financial system spread worldwide, intensifying concerns about a banking crisis.
A panic about Credit Suisse sparked the upheaval.
Notwithstanding the fact that Credit Suisse’s troubles are different from those of the U.S. banks that recently failed, anxiety over Credit Suisse contributes to broader economic unease.
The modest decline in market prices at the close indicated that traders were concerned about the state of the economy, as did trading in the bond and commodities markets.
The development astounded some investors, who blamed the frantic trading on uneasy investors in an unpredictably volatile year.
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