Stress that began the US banking system triggered a flight of $68 billion from failed Swiss financial giant Credit Suisse, according to new reports.
The bank told Reuters that over 61 billion francs ($68 billion) in assets left the bank in Q1 of this year, and that those outflows are growing by the day.
Credit Suisse said,
“These outflows have moderated but have not yet reversed as of April 24, 2023.”
Credit Suisse is currently being taken over by one of its old rivals, UBS, after an agreement last month.
The takeover was only made possible by the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA, and the Swiss National Bank, all of which agreed to support the deal. An 8 billion euro ($8.6 billion) insurance scheme was offered to UBS to protect it from potential losses, and the Swiss government also changed laws in order to allow it to go through without a shareholder vote.
Thomas Hallet, an analyst at investment bank KBW, says that Credit Suisse’s ability to generate revenue was so bad that the takeover deal might be a net negative on UBS unless a “deeper restructuring plan” was announced.
Credit Suisse’s troubles began when its depositors began pulling their funds after the bank was exposed to Silicon Valley Bank and Signature Bank.
Shares of Credit Suisse are currently trading at $0.91, 98.7% down from its all-time high of $74 last seen in 2007. The 127-year-old bank’s Q1 earnings report is expected to be its last.
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Source: https://dailyhodl.com/2023/04/24/us-banking-crisis-triggered-68000000000-in-outflows-from-global-financial-giant-report/