Credit Suisse to take out £45,000,000,000 emergency loan

ZURICH, SWITZERLAND - MARCH 16: The company logo is seen at the global headquarters of Swiss bank Credit Suisse the day after its shares dropped approximately 30% on March 16, 2023 in Zurich, Switzerland. Credit Suisse has reportedly asked the Swiss government for support following the refusal of a Saudi backer to provide any more money. The sharp drop in share price sent shares of other major European banks down. The disruption is coming on the heels of the failure of Silicon Valley Bank in the USA. (Photo by Arnd Wiegmann/Getty Images)

Credit Suisse is trying to calm investors after a major share price drop spread chaos across the sector (Picture: Getty)

Credit Suisse will borrow up to 50 billion Swiss francs (£45 billion) from Switzerland’s central bank as an emergency loan.

The bank’s share price plummeted by 24% on Wednesday after it found ‘material weaknesses’ in its internal controls on financial reporting.

The company announced the emergency loan today in a bid to boost its liquidity and calm investors.

Fears over the chaos spreading across the sector ramped up, with stock markets tumbling in the UK, Europe and in the US – as Credit Suisse’s woes came shortly after the Silicon Valley Bank collapse.

London’s FTSE 100 Index closed down 3.8% on Wednesday – its worst one-day performance since the start of the Covid pandemic.

The Bank of England is said to have been in emergency talks with its global central banking counterparts last night as the crisis deepened.

After the loan was announced, the Hang Seng Index in China tumbled nearly 2% and Japan’s Nikkei 225 was almost 1% lower.

The entrance to the global headquarters of Swiss bank Credit Suisse (Picture: Getty)

Wall Street markets have started steadying today, amid hopes the loan lifeline to Credit Suisse will halt any expansion of the troubles.

Europe strengthened its banking safeguards after the global financial crisis that followed the collapse of US investment bank Lehman Brothers in 2008, by transferring supervision of the biggest banks to the central bank.

The central bank is considered less likely than national supervisors to look the other way at developing problems.

The Credit Suisse parent bank is not part of EU supervision, but it has entities in several European countries that are subject to international rules.

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Source:: Metro News

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