Swiss regulators pledged a liquidity lifeline to Credit Suisse in an unprecedented move by a central bank after the flagship Swiss lender’s shares tumbled as much as 30 per cent on Wednesday.
In a joint statement, the Swiss financial regulator FINMA and the nation’s central bank sought to ease investor fears around Credit Suisse, saying it “meets the capital and liquidity requirements imposed on systemically important banks.” They said the bank could access liquidity from the central bank if needed.
The statement came after a major government and at least one bank put pressure on Switzerland to act, said people familiar with the matter, as the lender became caught up in a crisis of confidence after the collapse of Silicon Valley Bank last week.
Credit Suisse said it welcomed the statement of support from the Swiss National Bank and FINMA.
Credit Suisse would be the first major global bank to be given such a lifeline since the 2008 financial crisis - though central banks have extended liquidity more generally to banks during times of market stress including the coronavirus pandemic.
SVB’s demise, followed by that of Signature Bank two days later, sent global bank stocks on a roller-coaster ride this week, with investors discounting assurances from U.S. President Joe Biden and emergency giving banks access to more funding.
By Wednesday, focus had shifted from the United States to Europe, where Credit Suisse led a rout in bank shares after its largest investor said it could not provide more financial assistance because of regulatory constraints.