After the bank’s largest single-day selloff ever, Credit Suisse leaders met with Swiss authorities to discuss options to stabilize the bank. Late in the Swiss day, the central bank and the nation’s financial market regulator issued joint statement saying they would provide a financial lifeline to the bank “if necessary,” citing its importance to the wider financial system. All of that happened around the time Wall Street was getting ready to clock out.
The collapse of Silicon Valley Bank didn’t cause Credit Suisse to stumble, but it did put the Swiss bank under even more intense scrutiny. And it may have super-charged the selloff that brought Credit Suisse to its knees. Meanwhile, European and US banks are dealing with similar macroeconomic environmental factors. After years of ultra-low interest rates, yields on government bonds including Treasuries have shot up, eroding the value of banks’ underlying assets.