2023-06-24 08:22:50
The drama of the CS rescue is only now becoming apparent in its full scope. From Thursday, March 16th to Monday, March 20th, i.e. on three working days, the Paradeplatz multinational needed 168 billion emergency cash. Otherwise he would have collapsed. Without a word, following 167 years.
CS had almost nothing to offer as collateral for the many loans. According to the new Blog Macrocontroller.ch it should have been around 50 billion. [Red. Für Kredite von der Notenbank müssen Banken im gleichen Wert Aktiva, die nicht sofort flüssig gemacht werden können, als Sicherheiten bieten. 50 Milliarden waren zu wenig.]
SNB boss Thomas Jordan had the pistol on his chest. Money or crash – worldwide. “The SNB blinked and gave in – rightly so!” writes the blogger, who, according to the imprint, was “a research associate at the SNB in the field of foreign exchange investments”.
The “blink” of the top central banker of the Confederation has devastating consequences – not only for the republic with a small area and an impressive currency. “A central bank (not just the SNB) will still grant the loan with the virtual revolver on its chest!” That is the message that Jordan & Co. with the gigantic liquidity – speaking in the greatest distress – sent out to all bankers and investors.
The meltdown for central bankers. They live from one thing: their credibility. They have now gambled away this – thanks to CS rescue. Instead of dropping the bank as intended by Too Big To Fail, they rescued it with emergency law, with emergency billions, with everything the lender of last resort had.
A disaster for Jordan. He, who has presided over what is by far the most important institution in Helvetia for over 11 years, has failed. He got caught by a couple of CS gamblers who had their pockets stuffed for years and are now all over the mountains – or now at New UBS, Switzerland’s new Too Big to Rescue bank.
Jordan’s personal bankruptcy cannot be drawn too dramatically. The head of a central bank must never kneel and give up the last shirt of his institution to save a subordinate commercial bank from collapse. This is a no-go, a violation of everything that is sacred to the custodians of currencies, the custodians of the value of money.
Jordan mightn’t help it in March. CS was a ramshackle shop capable of tearing the world down, according to the SNB’s Financial Stability Report released yesterday. But why didn’t Jordan speak Tacheles in October 2022? Why didn’t he disempower the CS bosses and put the bank under state control?
The real bank run happened then. Jordan not only let him have his way, he also put his hands on his lap. By March it was too late; since he had become hostage to the CS-Masters of Bonuses.
Subject-related interest of the author
No. The author is editor and publisher of the online portal Inside Paradeplatz.
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Opinions in articles on Infosperber correspond to the personal assessments of the author.
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