The Swiss government will hold a special meeting about the unrest around Credit Suisse. This was reported by the Swiss news agency ATS based on sources. Actually, the Federal Council would have a scheduled meeting on Friday, but that is now being brought up because of the unrest around the Second bank of Switzerland.
According to ATS, it is not clear what decisions can be made during that consultation. Credit Suisse’s stock fell sharply on Wednesday on the Zurich stock exchange due to investor concerns about the bank’s financial stability. The Swiss central bank later promised to support Credit Suisse. The bank will borrow a maximum of 50 billion Swiss francs (50.6 billion euros) from the central bank. That news provided relief for investors on Thursday, as Credit Suisse’s share rose sharply.
Eurogroup president Paschal Donohoe, the group of finance ministers of the euro countries, told German newspaper Frankfurter Allgemeine Zeitung on Thursday that he is confident that European banks will be able to withstand the turmoil caused by Credit Suisse. According to him, Banks’buffers are strong and there is no question of “complacency” when it comes to risks for the financial sector. Banks are also prepared for further interest rate hikes by central banks, Donohoe said.
The Swiss bank Credit Suisse wants to borrow up to 51 billion euros from the Swiss central bank. The goal is to remove the anxiety about the bank. After a few statements from a major shareholder, this resulted in a sharp decline in prices.
Credit Suisse is the second largest bank in Switzerland. Within Europe, the bank is among the 20 largest banks. Ordinary individuals can be customers, but the bank is also a large asset manager, with a service for large companies. Credit Suisse has been around for almost 170 years and is active in 50 countries.