Rolling coverage of the latest economic and financial news, as troubled Credit Suisse gets central bank support to stem crisis rocking financial markets
Credit Suisse’s shares have jumped in value, reversing Wednesday’s slump, as investors welcome its plan to seek a lifeline from the Swiss central bank.
Credit Suisse’s shares jumped 32% at the start of trading in Zurich, after announcing it will borrow up to 50bn Swiss francs (£41bn) to boost its liquidity.
It has been undergoing a major restructuring, slashing thousands of jobs, shrinking its investment bank and focusing more on wealth management but this has done little to assuage the bears. The events of this week catalysed another major sell-off in the stock, raising concerns about the existential future of the bank, causing a painful ripple effect across broader markets.
Thankfully, there appears to be a lifeline for the beleaguered lender, which should prevent another Lehman moment, much to the relief of markets and Credit Suisse’s investors. The bank which has been around since 1856 has been instrumental in supporting growth of the Swiss economy with the SNB clearly judging that the bank’s systemic important overrides any moral hazard argument.
The Stoxx 600 banks index in Europe has shed more than 14.5% over the past five trading days until Wednesday’s close while Credit Suisse’s losses spiralled. However the sector look poised for a major rebound this morning.”
