|The headquarters of the Credit Suisse in Zurich, Switzerland (Photo: AFP/VNA)
According to CS, the loan reversed some of the heavy losses in the stock market and restored confidence in financial markets.
On Wednesday, Credit Suisse shares lost more than one-quarter of their value following the collapse of US Silicon Valley Bank (SVB). But the loan from the SNB helped CS shares increase 21% in the session before Wednesday’s opening, leading to a recovery of stock indexes in Europe.
Credit Suisse’s panic has once again raised concerns about the health of the banking system following the collapse of the Silicon Valley Bank last weekend.
But the Swiss Financial Market Supervisory Authority (FINMA) and the SNB said no sign indicates that there is a direct risk of a knock-on effect from the turmoil in the US banking sector with Swiss financial institutions.
Davide Oneglia, senior economist of TS Lombard, a UK-based leading independent investment research focusing on global macro and strategy, said the SVB collapse was a problem for the US only, but the market is now beset by a crisis of confidence.
Last week, Credit Suisse shares tumbled after it posted its biggest net loss of 7.9 billion USD in 2022 since the 2008 financial crisis. The record loss wiped out the company's profits from decades ago and caused the bank to fail to convince investors or stop customer cash outflows.
The 54 billion USD loan, a lifebuoy granted by the SNB on Thursday, will give Credit Suisse more time to restore customers’ trust and speed up its restructuring plan. But that's still not enough. The Credit Suisse case is making many investors concerned about potential losses of other banks in Europe.