the support of the authorities avoids the worst
DECRYPTION – The lifeline launched by the central bank allowed Credit Suisse to rebound on the stock market on Thursday.
The Swiss financial authorities were able to find the words on Wednesday evening to stop the bleeding on the Credit Suisse stock. A few hours after the close of markets, the central bank said it was ready to support the establishment by letting it access liquidity “if needed”.
On the night of Wednesday to Thursday, the second Swiss bank announced that it was going to borrow up to 50 billion Swiss francs (50.7 billion euros) in order to “strengthen preventively” its cash. This lifeline was eagerly awaited. The banking giant is systemic: it is part of the very small club of 30 banks which are deemed to play such an important role that they cannot be allowed to go bankrupt. Central bank support helped Credit Suisse bounce back on the stock market on Thursday. After soaring 40% at the opening, the stock closed up 19.15% (2.02 francs). The day before, its largest shareholder (9.98%), the National Bank…