Credit Suisse loses another 5% as traders process emergency liquidity

A Credit Suisse Group AG office building at night in Bern, Switzerland, on Wednesday, March 15, 2023.

Stefan Wermuth | Bloomberg | Getty Images

Shares of Credit Suisse fell 5% in Friday’s early trading, following gains from the previous session when the embattled lender said it will borrow up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.

The intervention of Swiss authorities, who also reaffirmed that Credit Suisse met capital and liquidity requirements imposed on “systemically important banks”, caused stocks to rise more than 18% on Thursday after hitting an all-time low on Wednesday Closed.

The drop came after top investor Saudi National Bank revealed it would not give the bank more money due to regulatory requirements, exacerbating a downward spiral in Credit Suisse’s share price that began with the slowdown in its annual results over financial reporting concerns.

The bank is undergoing a major strategic overhaul to restore stability and profitability after a litany of losses and scandals. The restructuring includes the spin-off from the investment bank to form US-based CS First Boston, a sharp reduction in exposure to risk-weighted assets and a $4.2 billion capital raise, funded in part by the 9.9 stake. % acquired by the Saudi National Bank.

Capital markets, however, are skeptical. Credit Suisse has seen massive outflows of assets under management, while credit default swaps, which insure bondholders against a company’s default, rose to new all-time highs this week.

This is a breaking news story and will be updated shortly.

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