Credit Suisse shares soar after central bank aid announced

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Credit Suisse's shares soared 30% on Thursday after it announced it will move to shore up its finances by borrowing up to nearly $54 billion from the Swiss central bank, bolstering confidence as fears about the banking system moved from the U.S. to Europe.

It was a massive swing from a day earlier, when shares of Switzerland’s second-largest commercial bank plunged 30% on the SIX stock exchange after its biggest shareholder said it would not put more money into Credit Suisse.

The banking turmoil has cast a shadow over Thursday’s meeting of the European Central Bank. Before the chaos erupted, ECB head Christine Lagarde had said it was “very likely” that the bank would make a large, half-percentage point rate increase to tackle stubbornly high inflation. Fanning new fears about the health of financial institutions following the recent collapse of Silicon Valley Bank and Signature Bank in the U.S., Credit Suisse's share price hit a record low Wednesday.

Credit Suisse reported earlier this week that managers had identified “material weaknesses” in the bank’s internal controls on financial reporting as of the end of last year. That fanned new doubts about the bank’s ability to weather the storm. Leaving a Credit Suisse branch in Geneva, Fady Rachid said he and his wife are worried about the bank’s health. He planned to transfer some money to UBS.

 

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