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Swiss regulators have provided Credit Suisse, the flagship Swiss lender, with a liquidity lifeline in an unprecedented move by a central bank after the bank's shares fell by as much as 30% on Wednesday.
Credit Suisse "meets the capital and liquidity standards imposed on systemically important banks," according to a joint statement from Switzerland's financial regulator, FINMA, and the central bank of the country.
The statement also emphasised that Credit Suisse might, under some circumstances, obtain liquidity from the central bank. The move followed pressure from high-profile government officials and at least one bank.
Also Read: SVB Financial Group Becomes Largest Bank Failure Since Financial Crisis
Credit Suisse appreciated the support declaration from FINMA and the Swiss National Bank. This development means that Credit Suisse would be the first global bank to be provided with such a lifeline since the 2008 financial crisis, although central banks have provided banks with additional liquidity in general at times of market stress, such as the coronavirus epidemic.
Global bank stocks have been on a roller-coaster this week as a result of the failure of Silicon Valley Bank (SVB) last week and the subsequent failure of Signature Bank two days later.
On Wednesday, attention moved from the United States to Europe as Credit Suisse was at the forefront of a collapse in bank stock prices after its top investor warned it could not offer more financial assistance due to regulatory constraints.
Source: Reuters
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