Financial markets, Credit Suisse sinks stock markets

International finances are still shaking. After the still hot case of the US Silicon Valley Bank, which knocked out the international stock markets for a day, yesterday a second blow from the tile put the nerves of savers and investors to the test. Swiss bank Credit Suisse plunged more than 20 percentage points on news that its main shareholder, the Saudi National Bank, has ruled out any intervention if new liquidity is needed. Lists panicked and in total lost 365 billion, 27 of which in Milan alone. The fear is great. Many fear a repeat of the drama of 2008, when the subprime mortgage hole caused the collapse of Lehman Brothers and rocked the global financial system. Milan lost 4.16% on sales that hit banking stocks hard: Unicredit lost 9.06%, Intesa Sanpaolo closed at -6.85%, Bper -7.23%, Banco Bpm -7.13%. Among other financials, Generali fell 5.86%. Saudi National Bank became Credit Suisse’s biggest shareholder in November, with a capital increase launched to finance a major restructuring of the bank. Asked by Bloomberg TV if the Saudi establishment could invest more, its president, Ammar al-Khudairy, clearly ruled out that option. “The answer is absolutely no,” he said, “for a number of reasons beyond the simplest ones, which are regulatory and statutory,” he explained. In turn, the president of Credit Suisse, Axel Lehmann, said that the institution does not need help from the government. “It’s not a problem,” he emphasized at a banking sector conference in Saudi Arabia. “We have solid financial relationships, a solid balance sheet”, he insisted, assuring that the institute already has “the medicine” it needs. As for the head of the Saudi national bank, he made a point of clarifying: “We currently own 9.8% of the bank. If we go above 10%, a series of new rules come into force” and “we are not inclined to enter into new legislation”.

Under Swiss law, FINMA, the market’s supervisory authority, must decide whether a shareholder of a large bank exceeds the 10% threshold. Swiss law provides that ‘natural or legal persons who hold, directly or indirectly, at least 10 percent of the capital or voting rights of a bank’ must provide ‘guarantees that their influence cannot be exercised to the detriment of prudent and sound management of the bank”. Exceeding this threshold in Switzerland’s second largest bank could cause an uproar in the Alpine country, as shareholders have already seen their stake diluted during the capital increase and continue to see the value of the placement plummet. Yesterday, the stock lost as much as 23.6% to hit a new all-time low of CHF 1,707. the bank. Bank. In early February, Credit Suisse announced a net loss of 7.3 billion Swiss francs (nearly 7.4 billion euros) for the 2022 financial year amid massive withdrawals from its clients and warned it still expects a loss “substantial” pre-tax in 2023. The bank has continued to rack up setbacks since then. Shares were already shaken on the stock exchange yesterday when the bank admitted “substantial weaknesses” in relation to its internal controls over financial reporting. A situation that complicates the task of the ECB, in view of tomorrow’s monetary policy meeting, which should parry yet another blow after the collapse of the American Silicon Valley Bank, Signature Bank and Silver Bank. Thus, analysts are divided between those who continue to believe in the announced rise of 50 basis points and those who, on the contrary, believe, given the bumps of recent days, that the Eurotower will be limited to 25 basis points. Meanwhile, the ECB has asked European banks to disclose their exposure to Credit Suisse while the US Treasury monitors the situation in contact with global counterparties. In short, after Covid and war, another black swan may emerge. As always in the first months of the year.