“Panic Selloff” and “Cash Pull” by Depositors: Credit Suisse Following the Footsteps of SVB! Posted on March 16, 2023 News By Akta Yadav 311 Views Credit Suisse:- If the last week witnessed the official collapse of one of the world's largest banks, this week might embrace its successors! When the SNB ran dry, it marked the commencement of something big worldwide, and Credit Suisse seems like one of the initial trails. The share prices of Credit Suisse took a mighty blow yesterday, as it dropped by 7% to a mere 1.70 Swiss Franc (151 INR). If that wasn't surprising to you, the share prices of Credit Suisse have gone down almost 77% in the last year, indicating the downfall as a result of long-term complications than a quick dive. Credit Suisse is also facing a sharp selloff, as investors are panicking amidst the rising tensions. The bank also accounted for a record high Credit Default Swaps (CDS), a vital factor that contributed highly to the Global Recessions back in 2007-08. There are several reasons for the failure of Credit Suisse. Out of those, one can be directly pointed toward SVB and its collapse recently. A bank of such stature always plays a role in the failure of subsequent banks in the upcoming time by instilling fear and a level of distrust among the depositors and investors. The release of the annual reports by Credit Suisse also played a role in its downfall. The report stated that there are "material weaknesses in internal control over financial reporting," leading the depositors further into "panic mode." The annual reports by CAGR also revealed that the Net Revenue was down by 34% year-on-year basis. The biggest hit, however, came from an unexpected place: Saudi Arabia. Surprisingly, the Saudi National Bank (SNB) is the biggest shareholder of Credit Suisse, as they acquired almost 10% of the stake at the bank last year. In this dire situation, when Credit Suisse requires further investments to get them back on track, the Chairman of Saudi National Bank, Ammar Al Khudairy, rejected all claims of a possible investment into Credit Suisse. He replied, "The answer is absolutely not for many reasons," when asked if SNB would make any more investments in Credit Suisse to safeguard the Switzerland-based firm. The statement was enough to fill the investors and depositors with fear and panic, as the company lost almost 25% in market capitalization. Former RBI Governor, Raghuram Rajan, has also stated his opinion on the matter. He blamed a lack of business and the underlying scandals behind the dive of Credit Suisse and suggested that the bank can get back to its feet with more "investments." Even after the shakedown, Rajan is confident and optimistic regarding the banking system in Europe. Founded in 1856 by a Swiss politician and businessman, Alfred Escher, Credit Suisse was one of the "least affected banks during the 2007 recession." After seeing the recent reports, we can be assured that the collapse (which seems inevitable) of Credit Suisse will be one of the biggest in the industry post the global financial crisis. For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true, and top stories of the world.
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Credit Suisse is also facing a sharp selloff, as investors are panicking amidst the rising tensions. The bank also accounted for a record high Credit Default Swaps (CDS), a vital factor that contributed highly to the Global Recessions back in 2007-08.
There are several reasons for the failure of Credit Suisse. Out of those, one can be directly pointed toward SVB and its collapse recently. A bank of such stature always plays a role in the failure of subsequent banks in the upcoming time by instilling fear and a level of distrust among the depositors and investors.
The release of the annual reports by Credit Suisse also played a role in its downfall. The report stated that there are "material weaknesses in internal control over financial reporting," leading the depositors further into "panic mode."
The annual reports by CAGR also revealed that the Net Revenue was down by 34% year-on-year basis.
The biggest hit, however, came from an unexpected place: Saudi Arabia. Surprisingly, the Saudi National Bank (SNB) is the biggest shareholder of Credit Suisse, as they acquired almost 10% of the stake at the bank last year.
In this dire situation, when Credit Suisse requires further investments to get them back on track, the Chairman of Saudi National Bank, Ammar Al Khudairy, rejected all claims of a possible investment into Credit Suisse.
He replied, "The answer is absolutely not for many reasons," when asked if SNB would make any more investments in Credit Suisse to safeguard the Switzerland-based firm.
The statement was enough to fill the investors and depositors with fear and panic, as the company lost almost 25% in market capitalization.
Former RBI Governor, Raghuram Rajan, has also stated his opinion on the matter. He blamed a lack of business and the underlying scandals behind the dive of Credit Suisse and suggested that the bank can get back to its feet with more "investments." Even after the shakedown, Rajan is confident and optimistic regarding the banking system in Europe.
Founded in 1856 by a Swiss politician and businessman, Alfred Escher, Credit Suisse was one of the "least affected banks during the 2007 recession." After seeing the recent reports, we can be assured that the collapse (which seems inevitable) of Credit Suisse will be one of the biggest in the industry post the global financial crisis.
For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true, and top stories of the world.
