Rumors about the possible bankruptcy of Credit Suisse alarmed the market
Credit Defolt Swaps (CDS) for the debt of one of the largest investment banks in Europe Credit Suisse jumped to a record level after the financial crisis of 2008. Such high values indicate a 23% probability of its collapse over the next five years.
The Credit Default Swaps (CDS) For Credit Suisse Are Going Absolutly Vertical and ARENACHINGSINGS OF THE GREAT FINANCIL CRISIS OF 2008. Higher CDS = Stronger Market-Wide Belief that CS IS Going To Fail.
From the maximums of 2009, the shares of the Swiss bank fell by 90%. Similar dynamics demonstrated securities of the largest financial organization in Germany Deutsche Bank.
At the auction on October 3, Credit Suisse shares fell by 12%. The market ignored the assurances of CEO Ulrich Kerner that the bank has sufficient liquidity and capital levels. In a note for employees, the top manager admitted that the organization is experiencing a “critical moment”.
On October 27, Kerner will present an updated strategic plan.
In September, Credit Suisse said that he is considering the possibility of reducing the investment business in the USA. Also among the options are the division of the organization into three separate components and the sale of a global trust bank. In addition, the financial institution is ready to reduce 5,000 employees.
The bank’s position could affect the deterioration of a market conditions against the backdrop of tightening monetary policy and signs of recession in the world economy.
Credit Suisse may recognize losses as a result of unsuccessful investments in the debt market, including in Citrix bond ($ 600 million). Credit Suisse also acts as a defendant in a claim at $ 1.27 billion, Georgian Prime Minister Bidzin Ivanishvili, who turned out to be a victim of deception as a result of incompetent capital management.
Credit Suisse is not the only large bank whose Price/Balance Cost shares fell below the alarming level of 40%.
This list includes Deutsche Bank, Societe Generale, Standard Charted, Credit Agricole, Uniclays and Bank of China. The market is afraid of repeating the collapse of Lehman Brothers and the Domino Principle Drive.
The collapse of one of them [in the list] can call into question the survival of the rest, the head of research in Goldmoney Aleser Maclaud is convinced.
Credit Suisse is not the only major Bank Whose Price-Book is Flating Warning Signals. The List Below Is of All G-Sibs with Ptbs of Under 40%. A Failure of One of the IS Likely to Call the Survival of the Others Into Question. Pic.Twitter.COM/LJA0YVRQCO
– Alasdair Macleod (@macleodfinance) October 2, 2022
Speculation on the insolvency of Credit Suisse as of 13:00 (Moscow time/Kyiv) did not extend to the mood of the market as a whole. Futures on s&P 500 is traded in a weak plus. The price of bitcoin grows https://gagarin.news/news/metamask-warned-users-about-phishing-risks/ by 0.5%, to $ 19 140, Ethereum – by 1.1%, up to $ 1290.
Earlier, against the backdrop of destabilization of debt markets and the sharp devaluation of the British pound and the euro against the dollar, there was a sharp surge in digital assets for these fiat currencies.
Recall, on September 21, Bitcoin responded with a sharp correction to raising the key rate of the US Federal Reserve System.
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