Troubled banking giant Credit Suisse Group AG on Thursday said it will borrow up to $ 54 billion from Swiss National Bank to shore up its finances. According to the bank this additional liquidity would support Credit Suisse's core business and clients as the lender is looking to become a simpler bank.
The borrowing by the lender will be made under the covered loan facility and a short-term liquidity facility. Additionally it will also be fully collateralized by high quality assets. The bank has also announced offers for senior debt securities for cash of up to 3 billion franc.
Credit Suisse's chief executive Ulrich Koerner in a statement said, "My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs."
Credit Suisse share's fall close to 30%
The lender's shares slumped by nearly 30 per cent on Wednesday. After it said it had found 'weakness' in its financial reporting there was a general sell off on the European markets with the addition of a wider financial crisis. After the fall of shares the bank's major investor, Saudi National Bank said that it will not inject any more funds in Credit Suisse.
Switzerland's central bank. The Swiss National Bank and the Swiss Financial Market Supervisory Authority in order to calm investor fears said that they will help the bank if necessary.
Banking sector crisis
The problems in the banking sector began in the last week after the collapse of Silicon Valley Bank followed by the collapse of Signature Bank. Amidst fears that other banks would face similar troubles, the trading in bank shares has been volatile this week.
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