On March 15, the Swiss National Bank (SNB) and Swiss Financial Market Supervisory released a joint statement relating to the stability of Credit Suisse and the Swiss banking system. The statement emphasized that the problems with the banks in the USA do not impose a risk for the Swiss Financial system indicating the soundness of the Swiss Financial System.
The report says that Credit Suisse has been impacted by the market reaction in recent times. However, it meets all the capital and liquidity requirements that systematically important banks are required to possess. Ulrich Korner, the CEO of Credit Suisse Group also confirmed that the bank has been conservatively positioned against interest rate risks admitting that they have some material weakness in the internal control.
The SBN statement came forward after Credit Suisse shares lost upto 30% leading to a precipitous drop in prices. As a result, it had been temporarily put on halt during the heavy sell-off. Alongside, trading was also put on halt for several other European banks on March 15.
The European Central Bank officials have established communication with several financial institutions about their Credit Suisse exposure. The French Finance Minister plans to discuss the scenario regarding the developments at Credit Suisse with its Swiss colleagues. However, the US Treasury officials are yet to give their statement upon monitoring the bank’s situation.
Unlike the Swiss National Bank, The Chairman of the Saudi Central Bank which is the largest shareholder of Credit Suisse with 9.8% of its stock clearly declared that it would not provide support for Credit Suisse.
