Has the financial crisis of American banks reached Switzerland?

A brief about Credit Suisse bank

Credit Suisse is a Swiss bank that was founded in 1856. It is considered one of the largest banks in the world and operates in more than 50 countries. The bank’s main activities include asset management, investment banking, risk management, monetary analysis, and financial consultancy. Currently, the bank is headquartered in Zurich, Switzerland and strives to be recognized as one of the world’s largest banks. In 2021, Credit Suisse faced difficulties due to financial and tax problems with some of its clients, and some of its managers also resigned.

What has happened to Credit Suisse bank?

With the successive collapse of American banks, concerns about an economic recession also hit Switzerland and Credit Suisse’s shares plummeted. However, the Swiss National Bank (SNB) and the Swiss Financial Market Supervisory Authority (FINMA) issued a statement indicating that “the problems of some US banks do not pose a direct risk to Swiss financial markets.”

According to the statement, Credit Suisse has capital requirements imposed on banks. Additionally, it added that if necessary, the Swiss National Bank will provide liquidity to the bank.
The Swiss central bank and FINMA, in a joint statement, noted that due to the current turmoil in the US banking market, there is no direct risk to Swiss institutions.
“Swiss regulations require all banks to maintain capital and liquidity that meets at least the standard requirements or exceeds them. In addition, systemically important banks must meet higher capital and liquidity requirements. This allows for negative effects of crises and shocks to be absorbed.”
The stock value of Credit Suisse and its debt securities have been affected, especially by recent market reactions. FINMA is in close contact with the bank and has access to all relevant supervisory law information. In this regard, FINMA confirms that Credit Suisse meets higher capital and liquidity requirements applicable to systemically important banks.
If necessary, the Swiss central bank will provide liquidity to the global bank. FINMA and the central bank are closely monitoring developments and are in close contact with the Federal Department of Finance to ensure financial stability.

Credit Suisse’s situation is important because if this bank also declares bankruptcy, investors will worry more about the future and turn their capital into gold to preserve the value of their assets. However, so far, the Swiss government has been able to reassure investors.

In this regard, the UK Treasury Minister announced: “The news from Swiss authorities this morning regarding CREDIT SUISSE is hopeful. We are closely monitoring the situation with the Bank of England.”

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