Swiss National Bank says it will provide Credit Suisse with liquidity if necessary
https://www.cnbc.com/2023/03/15/swi...redit-suisse-with-liquidity-if-necessary.html
Here we go, faster than I thought.
Credit Suisse causing the next major banking crisis worldwide ?
- Thread starter TrAndy2022
- Start date
Swiss National Bank says it will provide Credit Suisse with liquidity if necessary
https://www.cnbc.com/2023/03/15/swi...redit-suisse-with-liquidity-if-necessary.html
Here we go, faster than I thought.
Last week, their bonds were trading under 80 cents on the dollar. If you are still opening positions with them as a counterparty, then maybe you deserve a haircut.
Looks like the Swiss government is going to provide Credit Suisse with $54 Billion to stay afloat.
CSFB is not a bad company. It has a sound business model and treats its employees really well. Knows somebody who used to work for CSFB, one of the best companies he's ever worked for. He worked for the company until his retirement.
The company is just having some liquidity problems due to some of the failed business ventures it's involved in. Profits and losses are just two flip sides of the same coin. You win some and you lose some. You can't expect a financial company that's in the business of financial investing not to lose money and wins 100% of the time. LOL The company has already said that they have 153% of the liquidity available to meet all of the depositors' needs.
Some people must be desperately short on this company I guess. LOL
The company is just having some liquidity problems due to some of the failed business ventures it's involved in. Profits and losses are just two flip sides of the same coin. You win some and you lose some. You can't expect a financial company that's in the business of financial investing not to lose money and wins 100% of the time. LOL The company has already said that they have 153% of the liquidity available to meet all of the depositors' needs.
Some people must be desperately short on this company I guess. LOL
That's after my friend retired from there. I guess the company changed after he left. The thing is the company does have enough funds to meet depositors' demands.
https://www.msn.com/de-de/finanzen/...en-geschäft-mit-credit-suisse-ein/ar-AA18LbwZ
EXCLUSIVE Insider - Several banks are restricting business with Credit Suisse
Reuters
https://www.msn.com/de-de/finanzen/...uverbot-ab-2024-für-unrealistisch/ar-AA18OgUc
NEW YORK/LONDON, Mar 17 (Reuters) - For the crisis-plagued Credit Suisse, doing business with other financial institutions is also becoming increasingly difficult. At least four major houses, including Deutsche Bank and Societe Generale, have restricted their dealings with the major Swiss bank or its securities, according to five people with direct knowledge of the matter. The restrictions compound problems for the bank, which is trying to rebuild its business and get back on its feet after a series of costly failures.
Credit Suisse could not initially be reached for comment. The institute has stated that it is a strong, global bank. "We basically meet and exceed all regulatory requirements. Our capital and liquidity base is very strong," said CEO Ulrich Körner in an interview earlier this week.
Deutsche Bank, for example, this week lowered the lending value of Credit Suisse securities such as bonds that its wealth management customers provide as collateral for loans, said a senior executive at a European wealth manager who does business with the Frankfurt-based company. The bank had previously valued these securities at 70 to 80 percent of face value, the source said. Deutsche Bank declined to comment.
French bank Societe General has reduced its positions with Credit Suisse as counterparty in recent weeks, is holding them for the moment but is not adding to them any further, two people familiar with the situation said. The British bank HSBC is reviewing its exposure to Credit Suisse but has not yet made a decision to reduce it, another insider said. The institute is monitoring the situation closely and will make a decision early next week. Both institutes declined to comment. Another person reported on an international bank that had at least reduced its unsecured exposure.
Credit Suisse has been struggling with a loss of confidence from investors and customers for days. Originally, the triggers were home-made problems. But the crisis surrounding the American Silicon Valley Bank further fueled the uncertainty. To show that Credit Suisse remains liquid, even when customers withdraw money, the Swiss National Bank SNB made up to 50 billion francs in loans available to it on Thursday night. The bank accepted the liquidity injection and is now tapping it in tranches. (Report by Shankar Ramakrishnan, Stefania Spezzati and Sumeet Chatterjee, written by Oliver Hirt and Sabine Wollrab, edited by Birgit Mittwollen. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.
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https://www.reuters.com/business/cr...-talks-ubs-seeks-swiss-assurances-2023-03-19/
UBS makes offer for Credit Suisse, bondholder losses considered
By Stefania Spezzati
, Oliver Hirt
and John O'Donnell
March 19 (Reuters) - UBS Group AG (UBSG.S) is in emergency talks to buy fellow Swiss banking giant Credit Suisse (CSGN.S) as authorities bid to stave off turmoil when global markets reopen on Monday, with reports saying UBS has offered to pay up to $1 billion.
Swiss authorities are examining imposing losses on Credit Suisse bondholders as part of a rescue, two sources with knowledge of the matter said on Sunday, while European regulators are apprehensive for fear it could hit investor confidence elsewhere.
Authorities have been racing to rescue the 167-year-old bank, among the world's largest wealth managers, to avoid a collapse in confidence among investors as some banks struggle with the fallout of rapidly rising central bank interest rates.
Bloomberg News, citing people with knowledge of the matter, said Credit Suisse was resisting the offer of up to $1 billion, believing it to be too low and that it would hurt shareholders and employees who hold deferred stock.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-share deal was set to be signed as early as Sunday. Citing people familiar with the matter, it said an offer made on Sunday was of 0.25 Swiss francs ($0.27) per Credit Suisse share, well below Friday's closing price of 1.86 Swiss francs and all but wiping out the bank's existing shareholders.
UBS has also insisted on a "material adverse change" that voids the deal in the event its credit default spreads jump by 100 basis points or more, the report added. It said there was no guarantee that terms will remain the same or that a deal would be reached.
A person with knowledge of the talks earlier told Reuters that UBS sought $6 billion from the Swiss government as part of a possible purchase of its rival. The guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges.
One source previously said the talks were encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combined. The Swiss Bank Employees Association on Sunday called for the immediate creation of a task force to deal with the risk to jobs.
BONDHOLDER LOSSES
A final decision on imposing losses on bondholders has not been taken, and the terms could still change, according to sources. Losses imposed on bondholders may need to be larger if Credit Suisse were wound down rather than if it were taken over by UBS, one of the sources said.
French finance minister Bruno Le Maire on Sunday called for a "quick, massive and credible" solution for Credit Suisse.
The fraught weekend negotiations follow a brutal week for banking stocks and efforts in Europe and the United States to support the sector since the collapse of U.S. lenders Silicon Valley Bank and Signature Bank.
U.S. President Joe Biden's administration moved to backstop consumer deposits while the Swiss central bank lent billions to Credit Suisse to stabilise its balance sheet.
The plan could see Credit Suisse's Swiss business spun off, while Bloomberg reported that the takeover talks were throwing into doubt plans to hive off its investment bank under the First Boston brand.
U.S. authorities are working with their Swiss counterparts to help broker a deal, Bloomberg reported, while Sky News said the Bank of England has indicated to international counterparts and to UBS that it would back the proposed takeover of Credit Suisse, which counts Britain as a key market.
Reuters Graphics Reuters Graphics
FORCEFUL RESPONSE
Credit Suisse shares lost a quarter of their value in the last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from a scandals that have undermined the confidence of investors and clients.
"The last days of Credit Suisse", proclaimed the front page of Swiss newspaper NZZ am Sonntag over an illustration of the bank's headquarters in flames.
Reuters Graphics
The failure of California-based Silicon Valley Bank brought into focus how a campaign of interest rate hikes by the U.S. Federal Reserve and other central banks - including the European Central Bank on Thursday - was pressuring the banking sector.
SVB and Signature's collapses are the largest bank failures in U.S. history behind the demise of Washington Mutual during the global financial crisis in 2008.
The S&P Banks index (.SPXBK) has fallen 22% in its largest two-week slide since the pandemic shook markets in March 2020.
U.S. banks have sought a record $153 billion in emergency liquidity from the Federal Reserve in recent days and big lenders threw a $30 billion lifeline to smaller lender First Republic (FRC.N).
In Washington, the focus has turned to greater oversight to ensure banks and their executives are held accountable with Biden calling on Congress to give regulators greater power over the sector.
The swift and dramatic events may mean big banks get bigger, smaller banks may struggle to keep up and more regional lenders may close down.
"People are actually moving their money around, all these banks are going to look fundamentally different in three months, six months," said Keith Noreika, vice president of Patomak Global Partners and a Republican former U.S. comptroller of the currency.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
So it seems that nobody wants the investment bank, only wealth and asset management is interesting to some banks. So if the investment bank of Credit Suisse is sold and cannot survive on its own because of the expected losses this year too, then all deals must be unwinded as CS is no more a solid contract partner. Already 4 major banks has restricted their business with CS. So this can be turbulent in the next days and weeks when everyone wants to be out of CS as counterparty. It may be unwinded in a solid manner but this not sure actually. Will be interesting to see how it plays out next week(s).
EXCLUSIVE Insider - Several banks are restricting business with Credit Suisse
Reuters
https://www.msn.com/de-de/finanzen/...uverbot-ab-2024-für-unrealistisch/ar-AA18OgUc
NEW YORK/LONDON, Mar 17 (Reuters) - For the crisis-plagued Credit Suisse, doing business with other financial institutions is also becoming increasingly difficult. At least four major houses, including Deutsche Bank and Societe Generale, have restricted their dealings with the major Swiss bank or its securities, according to five people with direct knowledge of the matter. The restrictions compound problems for the bank, which is trying to rebuild its business and get back on its feet after a series of costly failures.
Credit Suisse could not initially be reached for comment. The institute has stated that it is a strong, global bank. "We basically meet and exceed all regulatory requirements. Our capital and liquidity base is very strong," said CEO Ulrich Körner in an interview earlier this week.
Deutsche Bank, for example, this week lowered the lending value of Credit Suisse securities such as bonds that its wealth management customers provide as collateral for loans, said a senior executive at a European wealth manager who does business with the Frankfurt-based company. The bank had previously valued these securities at 70 to 80 percent of face value, the source said. Deutsche Bank declined to comment.
French bank Societe General has reduced its positions with Credit Suisse as counterparty in recent weeks, is holding them for the moment but is not adding to them any further, two people familiar with the situation said. The British bank HSBC is reviewing its exposure to Credit Suisse but has not yet made a decision to reduce it, another insider said. The institute is monitoring the situation closely and will make a decision early next week. Both institutes declined to comment. Another person reported on an international bank that had at least reduced its unsecured exposure.
Credit Suisse has been struggling with a loss of confidence from investors and customers for days. Originally, the triggers were home-made problems. But the crisis surrounding the American Silicon Valley Bank further fueled the uncertainty. To show that Credit Suisse remains liquid, even when customers withdraw money, the Swiss National Bank SNB made up to 50 billion francs in loans available to it on Thursday night. The bank accepted the liquidity injection and is now tapping it in tranches. (Report by Shankar Ramakrishnan, Stefania Spezzati and Sumeet Chatterjee, written by Oliver Hirt and Sabine Wollrab, edited by Birgit Mittwollen. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.
---------------------------------------------------------------------------------------------
https://www.reuters.com/business/cr...-talks-ubs-seeks-swiss-assurances-2023-03-19/
UBS makes offer for Credit Suisse, bondholder losses considered
By Stefania Spezzati
, Oliver Hirt
and John O'Donnell
March 19 (Reuters) - UBS Group AG (UBSG.S) is in emergency talks to buy fellow Swiss banking giant Credit Suisse (CSGN.S) as authorities bid to stave off turmoil when global markets reopen on Monday, with reports saying UBS has offered to pay up to $1 billion.
Swiss authorities are examining imposing losses on Credit Suisse bondholders as part of a rescue, two sources with knowledge of the matter said on Sunday, while European regulators are apprehensive for fear it could hit investor confidence elsewhere.
Authorities have been racing to rescue the 167-year-old bank, among the world's largest wealth managers, to avoid a collapse in confidence among investors as some banks struggle with the fallout of rapidly rising central bank interest rates.
Bloomberg News, citing people with knowledge of the matter, said Credit Suisse was resisting the offer of up to $1 billion, believing it to be too low and that it would hurt shareholders and employees who hold deferred stock.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-share deal was set to be signed as early as Sunday. Citing people familiar with the matter, it said an offer made on Sunday was of 0.25 Swiss francs ($0.27) per Credit Suisse share, well below Friday's closing price of 1.86 Swiss francs and all but wiping out the bank's existing shareholders.
UBS has also insisted on a "material adverse change" that voids the deal in the event its credit default spreads jump by 100 basis points or more, the report added. It said there was no guarantee that terms will remain the same or that a deal would be reached.
A person with knowledge of the talks earlier told Reuters that UBS sought $6 billion from the Swiss government as part of a possible purchase of its rival. The guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges.
One source previously said the talks were encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combined. The Swiss Bank Employees Association on Sunday called for the immediate creation of a task force to deal with the risk to jobs.
BONDHOLDER LOSSES
A final decision on imposing losses on bondholders has not been taken, and the terms could still change, according to sources. Losses imposed on bondholders may need to be larger if Credit Suisse were wound down rather than if it were taken over by UBS, one of the sources said.
French finance minister Bruno Le Maire on Sunday called for a "quick, massive and credible" solution for Credit Suisse.
The fraught weekend negotiations follow a brutal week for banking stocks and efforts in Europe and the United States to support the sector since the collapse of U.S. lenders Silicon Valley Bank and Signature Bank.
U.S. President Joe Biden's administration moved to backstop consumer deposits while the Swiss central bank lent billions to Credit Suisse to stabilise its balance sheet.
The plan could see Credit Suisse's Swiss business spun off, while Bloomberg reported that the takeover talks were throwing into doubt plans to hive off its investment bank under the First Boston brand.
U.S. authorities are working with their Swiss counterparts to help broker a deal, Bloomberg reported, while Sky News said the Bank of England has indicated to international counterparts and to UBS that it would back the proposed takeover of Credit Suisse, which counts Britain as a key market.
Reuters Graphics Reuters Graphics
FORCEFUL RESPONSE
Credit Suisse shares lost a quarter of their value in the last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from a scandals that have undermined the confidence of investors and clients.
"The last days of Credit Suisse", proclaimed the front page of Swiss newspaper NZZ am Sonntag over an illustration of the bank's headquarters in flames.
Reuters Graphics
The failure of California-based Silicon Valley Bank brought into focus how a campaign of interest rate hikes by the U.S. Federal Reserve and other central banks - including the European Central Bank on Thursday - was pressuring the banking sector.
SVB and Signature's collapses are the largest bank failures in U.S. history behind the demise of Washington Mutual during the global financial crisis in 2008.
The S&P Banks index (.SPXBK) has fallen 22% in its largest two-week slide since the pandemic shook markets in March 2020.
U.S. banks have sought a record $153 billion in emergency liquidity from the Federal Reserve in recent days and big lenders threw a $30 billion lifeline to smaller lender First Republic (FRC.N).
In Washington, the focus has turned to greater oversight to ensure banks and their executives are held accountable with Biden calling on Congress to give regulators greater power over the sector.
The swift and dramatic events may mean big banks get bigger, smaller banks may struggle to keep up and more regional lenders may close down.
"People are actually moving their money around, all these banks are going to look fundamentally different in three months, six months," said Keith Noreika, vice president of Patomak Global Partners and a Republican former U.S. comptroller of the currency.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
So it seems that nobody wants the investment bank, only wealth and asset management is interesting to some banks. So if the investment bank of Credit Suisse is sold and cannot survive on its own because of the expected losses this year too, then all deals must be unwinded as CS is no more a solid contract partner. Already 4 major banks has restricted their business with CS. So this can be turbulent in the next days and weeks when everyone wants to be out of CS as counterparty. It may be unwinded in a solid manner but this not sure actually. Will be interesting to see how it plays out next week(s).
Credit Suisse crisis talks jeopardize First Boston plan
Articles by Marion Halftermeyer, Katherine Griffiths, Steven Arons and Dinesh Nair • 5 hours ago
UBS shows little appetite for Credit Suisse's investment banking business as part of a government-engineered takeover. Thus, the plan to separate this business legally and operationally and finally to bring it to the stock market is shaky.
Klein and others had already spoken to interested parties to find investors for the business. Recent events may force an acceleration of these efforts to save the spin-off, according to people familiar with the matter. Credit Suisse said last year it had a $500 million (€469 million) commitment from a potential CS First Boston financier, but never named the investor.
The riskier investment banking and trading businesses have become a sticking point in takeover talks with UBS, Bloomberg previously reported. In one scenario, UBS could try to divest or wind up part of its investment banking business, according to people familiar with the matter.
Efforts to spin off CS First Boston were still in their infancy when Credit Suisse was hit by another crisis of confidence this week. The spin-off was a key element of the ailing Swiss lender's restructuring efforts and an attempt to protect and expand its best investment banking businesses, such as merger and acquisition advice. Chief Executive Officer Ulrich Koerner said just this week that the firm was looking into a possible IPO for the business in 2025 and that there were several parties interested in taking a stake.
Last year, Credit Suisse entrusted board member and long-time dealmaker Klein with the management of CS First Boston, who would have to give up a large chunk of money if the deal failed. He stepped down from the board of directors and recently sold his boutique investment firm to the bank as part of a $210 million deal that has yet to close.
Break-up scenario
Credit Suisse crisis talks jeopardize First Boston plan© BLOOMBERG NEWS
In a break-up scenario, Credit Suisse could still try to spin off the investment bank and even try to accelerate efforts, said a person familiar with discussions about possible options. Such a move would likely be complicated and would require regulatory approval, said one of the people, all of whom asked not to be named.
Another scenario would be that the parts of the investment bank that were destined for First Boston end up in a bad bank to be wound up, according to one of the people.
Spokesmen for UBS and Credit Suisse declined to comment on the matter. A spokesman for Klein declined to comment directly.
The move had caught Wall Street's attention because it was a spin-off that was unique in modern finance and represented a rare business model that combined a boutique-like advisory practice with the need for a larger balance sheet to back the leveraged finance division. Klein had promised a partnership-like structure reminiscent of an earlier era that would allow star dealmakers a share of the profits.
As Credit Suisse announced in its annual report this week, executives at investment banking spinoff First Boston will own up to one-fifth of that business if plans for an IPO go go through. Employees would receive blocked shares of CS First Boston, which would vest three years after the IPO and would be subject to a further holding obligation.
CS First Boston will have Goldman-style partner bankers: circles
Between 50 and 100 existing CS First Boston managing directors would be eligible for partnership in the boutique's new organizational structure, which will be similar to that of banks such as Goldman Sachs Group Inc., executives said at a recent meeting, according to people attending the presentations.
Credit Suisse's First Boston Plan in Doubt Amid Crisis Talks
--With assistance from Gillian Tan.
Articles by Marion Halftermeyer, Katherine Griffiths, Steven Arons and Dinesh Nair • 5 hours ago
UBS shows little appetite for Credit Suisse's investment banking business as part of a government-engineered takeover. Thus, the plan to separate this business legally and operationally and finally to bring it to the stock market is shaky.
Klein and others had already spoken to interested parties to find investors for the business. Recent events may force an acceleration of these efforts to save the spin-off, according to people familiar with the matter. Credit Suisse said last year it had a $500 million (€469 million) commitment from a potential CS First Boston financier, but never named the investor.
The riskier investment banking and trading businesses have become a sticking point in takeover talks with UBS, Bloomberg previously reported. In one scenario, UBS could try to divest or wind up part of its investment banking business, according to people familiar with the matter.
Efforts to spin off CS First Boston were still in their infancy when Credit Suisse was hit by another crisis of confidence this week. The spin-off was a key element of the ailing Swiss lender's restructuring efforts and an attempt to protect and expand its best investment banking businesses, such as merger and acquisition advice. Chief Executive Officer Ulrich Koerner said just this week that the firm was looking into a possible IPO for the business in 2025 and that there were several parties interested in taking a stake.
Last year, Credit Suisse entrusted board member and long-time dealmaker Klein with the management of CS First Boston, who would have to give up a large chunk of money if the deal failed. He stepped down from the board of directors and recently sold his boutique investment firm to the bank as part of a $210 million deal that has yet to close.
Break-up scenario
Credit Suisse crisis talks jeopardize First Boston plan© BLOOMBERG NEWS
In a break-up scenario, Credit Suisse could still try to spin off the investment bank and even try to accelerate efforts, said a person familiar with discussions about possible options. Such a move would likely be complicated and would require regulatory approval, said one of the people, all of whom asked not to be named.
Another scenario would be that the parts of the investment bank that were destined for First Boston end up in a bad bank to be wound up, according to one of the people.
Spokesmen for UBS and Credit Suisse declined to comment on the matter. A spokesman for Klein declined to comment directly.
The move had caught Wall Street's attention because it was a spin-off that was unique in modern finance and represented a rare business model that combined a boutique-like advisory practice with the need for a larger balance sheet to back the leveraged finance division. Klein had promised a partnership-like structure reminiscent of an earlier era that would allow star dealmakers a share of the profits.
As Credit Suisse announced in its annual report this week, executives at investment banking spinoff First Boston will own up to one-fifth of that business if plans for an IPO go go through. Employees would receive blocked shares of CS First Boston, which would vest three years after the IPO and would be subject to a further holding obligation.
CS First Boston will have Goldman-style partner bankers: circles
Between 50 and 100 existing CS First Boston managing directors would be eligible for partnership in the boutique's new organizational structure, which will be similar to that of banks such as Goldman Sachs Group Inc., executives said at a recent meeting, according to people attending the presentations.
Credit Suisse's First Boston Plan in Doubt Amid Crisis Talks
--With assistance from Gillian Tan.
