Banking stocks rally as crisis-hit Credit Suisse taps central bank for cash

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Market focus turning to ECB, which is expected to scale back previous plans for a half-point interest rate hike

Credit Suisse tapped the Swiss National Bank for as much as 50 billion francs and offered to repurchase debt, seeking to stem a crisis of confidence. Photograph: Jose Cendon/BloombergEuropean banking stock rallied on Thursday after troubled lender Credit Suisse tapped the Swiss National Bank for as much as 50 billion francs of loans and offered to buy back some of its debt, as it raced to shore up confidence after a volatile session that saw it stock hit an all-time low.

The Stoxx 600 Banks Index was up 2.9 per cent in early trading, having fallen by 6.9 per cent in the previous session, while Dublin’s Iseq Financial index, dominated by the three remaining Irish banks, advanced 9 per cent, having plunged 16 per cent over the previous six days. Market sentiment towards the global banking has been severely hit as three niche US banks, including Silicon Valley Bank, collapsed over the past nine days.

Credit Suisse, which is in the middle of a major restructuring plan following a series of scandals in recent years, issued a statement in the early hours of Thursday saying that it will borrow money from a central bank liquidity facility and is making a tender offer to buy back up to ChF3 billion of dollar and euro-denominated debt.

 

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