2023-06-24 08:01:28
Unprecedented, the reflux of funds suffered by Credit Suisse have proved to be greater than anticipated by the regulators., Estimates the Swiss National Bank (archives). © KEYSTONE/AP/Walter Bieri
Published on 22.06.2023
The SNB wants to learn from the debacle of Credit Suisse, merged in March with its competitor UBS to avoid bankruptcy. New measures must strengthen the solidity of institutions in order to avoid a loss of confidence among investors and customers.
Banks must comply with capital requirements, but this is not enough, the Swiss National Bank (SNB) said in its annual report on financial stability published on Thursday.
The capital ratios of the two-veiled bank did indeed exceed the required requirements, but the market and the rating agencies increasingly questioned Credit Suisse’s ability to generate profits, its solidity and its ability to put implement its restructuring process announced in October 2022.
The issuing institution also found that the so-called AT1 financial instruments, intended to absorb losses, “have not been effective”. Credit Suisse did not cancel interest payments on these bonds, which would have improved the financial situation.
The ebbs of funds recorded by the bank at the end of 2022 and the beginning of 2023 were “unprecedented” and greater than anticipated by regulators. The bank’s liquidity and the SNB’s support “have not been sufficient to cover the massive liquidity outflows”, she noted.
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