The priority is to understand which European and American institutions would suffer losses in the event of a bankruptcy in Zurich. The rival who is welcoming many former account holders of the bank in crisis, seems interested only in its Swiss assets
The collapse of Credit Suisse is worrying. Now the first objective, as reported by the Corriere della Sera, is to check which other banks are exposed to Credit Suisse mainly in derivatives. The priority is to understand which European and American institutions would suffer losses in the event of a bankruptcy in Zurich: perhaps because certain banks have sold insurance to others against Credit Suisse’s default or simply because they have claims on it. As for this, the polls of the last few hours are highlighting that Italian institutions are rather sheltered. At the moment, however, the picture for other large European banks is less clear. The goal remains to save Credit Suisse or at least save its assets under a new banner; prevent the bank from taking the books to court, seeking protection from its creditors. With balance sheet liabilities of 486 billion Swiss francs (492 billion euros) at the end of 2022, this is the scenario that everyone absolutely wants to avoid. (ASIAN MARKETS OPEN DOWN)
The instrument cannot be a public bailout: the bank is too big for its country, with a balance sheet worth more than half of Switzerland’s gross product. Rather, the aim is a sale and there is no price problem: a company with assets of the equivalent of 538 billion euros at the end of last year, but which lost 1.3 billion in the last quarter alone and is worth today on the stock exchange the equivalent of seven billion euros can be bought with little (apparently). The problem is that the bank has to be torn apart before it can be sold, because no competitor is willing to absorb it whole. So more buyers need to be found in more parts of the world and quickly, because Credit Suisse is suffocating. As you can well understand, this is an uphill operation. UBS, which is welcoming many former Credit Suisse current account holders, seems interested only in the Swiss assets of its rival. Those of New York, London, Frankfurt and others remain. But it won’t be easy to convince potential buyers to take charge. Accelerating everything was the failure of California’s Silicon Valley Bank (SVB) on Friday, which sharpened mistrust of all the already fragile banks.