Credit Suisse’s borrowing will be made under the covered loan facility and a short-term liquidity facility, fully collateralised by high-quality assets. It also announced offers for senior debt securities for cash of up to 3 billion francs.
“This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs,” the bank said.
Credit Suisse Chief Executive Ulrich Koerner had earlier on Wednesday sought to reassure investors about the lender’s strong liquidity.
“Our capital, our liquidity basis is very, very strong,” Koerner told media. “We fulfil and overshoot basically all regulatory requirements.”
Meanwhile, Credit Suisse bankers in Asia reached out to clients to reassure them after the latest inflow of funds.
“We’ve been telling them to read the statements and look at the fact that we are buying 3 billion francs worth of bonds because they are so cheap,” said a Hong Kong-based senior banker. “That’s all we can say and try and plough on with work.”
The banker declined to be named as they were not authorised to speak to the media.
EUROPEAN EPICENTRE
The 167-year-old bank’s problems have shifted the focus for investors and regulators from the United States to Europe, where Credit Suisse led a selloff in bank shares after its largest investor said it could not provide more financial assistance because of regulatory constraints.
The concerns about Credit Suisse added to broader banking sector fears sparked by last week’s collapse of Silicon Valley Bank (SVB) and Signature Bank, two US mid-size firms.
Investor focus is also on any action by central banks and other regulators elsewhere to restore confidence in the banking system.
Policymakers in Australia and South Korea sought to reassure markets on Thursday that banks in their jurisdictions were well-capitalised.
SVB’s demise last week, followed by that of Signature Bank two days later, sent global bank stocks on a roller-coaster ride as investors feared another Lehman Brothers moment, the Wall Street giant whose failure had triggered the global financial crisis more than a decade ago.
On Wednesday, Credit Suisse shares led a 7 per cent fall in the European banking index, while five-year credit default swaps for the flagship Swiss bank hit a new record high.
The investor exit for the doors raised fears of a broader threat to the financial system, and two supervisory sources told Reuters that the European Central Bank had contacted banks on its watch to quiz them about their exposures to Credit Suisse.
The US Treasury also said it is monitoring the situation around Credit Suisse and is in touch with global counterparts, a Treasury spokesperson said.
