The Hour of Truth for Credit Suisse

March 15, 2023, 2022 (EIRNS)—FLASH: The Swiss National Bank stands ready to intervene to support Credit Suisse, it was announced late today by the Swiss Financial Market Supervisory Authority. The loan may be in the range of $54 billion to Credit Suisse.

The “systemically relevant” financial institution, Credit Suisse, has been hemorrhaging customers, forcing it to borrow CHF39 billion (Swiss francs) from the central bank last year, in addition to having to sell off assets in order to generate liquidity. Those were big customers, but small customers are “sticky” and are not leaving the bank, the management said—at least not yet.

At the end of 2022, Credit Suisse had almost CHF119 billion in “retail deposits and deposits from small business customers.” The moment those customers begin to flee, that is the end for the bank, wrote Inside Paradeplatz. (in German)

Credit default swaps for Credit Suisse reached an historic high of 517.7 on March 13, from a low of about 60 at the beginning of last year. A financial trader told EIR this morning that rumors are circulating about Credit Suisse’s enormous derivatives exposure. The same source speculated that if push comes to shove, central banks will implement a massive bailout, this time however with central bank digital currency (CBDC). They will force banks to accept CBDC as they believe it won’t spill over into inflation.