The Switzerland-based bank has a long history of scandal, which has contributed to its involvement in the global banking crisis.
Topline
Uncertainty around Credit Suisse—the Swiss banking giant that’s long been plagued by regulatory woes and financial stress—has wreaked havoc on global markets as concerns over rising interest rates around the world lead to historic bank failures and abrupt government intervention.Key Facts
Following an announcement the Swiss National Bank would loan Credit Suisse up to $54 billion, shares rose as much as 33% on Thursday, settling on around a 17% gain as investors rallied around the central bank’s efforts to help Credit Suisse avoid a potential collapse.
The sudden stock surge is a stark difference from the bank’s seven-day losing streak, when shares were halted Wednesday because they fell to as much as 21%.
The chaos broke out following Credit Suisse’s Tuesday announcement, stating it found “material weakness” in its 2021 and 2022 financial reporting process.
After the lender shared the weakness found in its 2021 and 2022 reporting process (which includes lack of effective risk assessment to identify misstatements in its financial reporting), the Saudi National Bank—Credit Suisse’s biggest backer—said it wouldn’t buy more shares in the Swiss bank.
Then the collapse of Signature and Silicon Valley Bank—two smaller regional lenders—sent panic throughout the investor world as concerns arose for Credit Suisse because, as Arthur Wilmarth, professor at the George Washington School of Law, told CNN, the collapse of Signature and SVB was a signal trouble could “spread to banks of a very large size.
