Credit Suisse’s Problems Manageable-U. S. Banks
2023.03.15 20:36
Credit Suisse’s Problems Manageable-U. S. Banks
By Ray Johnson
Budrigannews.com – According to three industry sources on Wednesday, who declined to be identified due to the sensitive nature of the situation, large U.S. banks have managed their exposure to Credit Suisse over the past few months and view risks from the lender as contained up until this point.
Before Swiss regulator FINMA and the country’s central bank announced on Wednesday that the Swiss National Bank would supply Credit Suisse with liquidity “if necessary,” a first for a global bank since the financial crisis, industry sources spoke. In a statement, Credit Suisse expressed its delight at the news.
Following the collapse of three U.S. lenders, including Silicon Valley Bank and Signature Bank (NASDAQ:), bank stocks have been on a roller coaster this week. respectively the second and third largest bank failures in American history. After assurances from U.S. President Joe Biden on Monday, bank stocks plummeted on Tuesday, hoping the worst of the market rout was over.
The European banking index fell 7% earlier on Wednesday, with Credit Suisse shares falling as much as 30.8%. The U.S. Depository said it is observing the circumstance at Credit Suisse and is in contact with worldwide partners about it.
According to one source, bankers were more concerned about the unanticipated effects of the Swiss lender’s problems, or contagion.
A source says that a major U.S. bank is still working with Credit Suisse as a counterparty, but it is carefully managing its small exposure.
One resource supervisor in New York was evaluating its exchanging counterparty risk with Credit Suisse, as per a source acquainted with the present circumstance.
According to the source, “people are all examining their books, what open positions we have with Credit Suisse.”
According to two supervisory sources, the European Central Bank (ECB) had contacted banks under its supervision to inquire about their exposures to Credit Suisse.
On Wednesday, CEO Ulrich Korner told Channel News Asia: We are a dependable bank. We are a global bank regulated by Switzerland. We satisfy and fundamentally overshoot every administrative prerequisite. Our liquidity basis and capital are extremely strong.
