Credit Suisse shares soar after central bank offers lifeline

“These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders,” Chief Executive Ulrich Koerner said in a statement.

Central banks in the U.S. and Europe have moved quickly to restore confidence in the banking system after last week’s collapse of Silicon Valley Bank, the second-biggest bank failure in U.S. history.Article contentU.S. authorities on Sunday said they would guarantee all of the deposits of California-based Silicon Valley Bank and the smaller Signature Bank of New York, making sure people wouldn’t be hurt by the collapse of the banks. The U.S.

“That was what spooked the markets as a whole, because they didn’t stand behind it,” Gieve told the BBC. “So what we’ve seen overnight is the Swiss central bank saying, ‘No, we will not let this get into a disorderly collapse.’ In order to boost the return on their investments, banks needed to take more risks and some “did this more prudently than others,” said Sascha Steffen, professor of finance at the Frankfurt School of Finance & Management.Article content

Credit Suisse also reported Tuesday 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. Credit Suisse is “a much bigger concern for the global economy” than the midsize U.S. banks that collapsed, said Andrew Kenningham, chief Europe economist for Capital Economics.The troubles “once more raise the question about whether this is the beginning of a global crisis or just another ‘idiosyncratic’ case,” Kenningham said in a note.

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