The indicative price of its shares Credit Suisse was 21% higher in today’s pre-session trading on the Swiss stock exchange, after the the country’s central bank offered to finance the bank with liquidity.

Switzerland’s regulators stepped in today by providing a tens of billions of dollars in liquidity to Crédit Suisse, an unprecedented move by the Swiss central bank, as the bank’s shares took a nightmarish tumble on Wednesday, falling even more than 30% on the stock market. before closing at -24.24%.

The decision of the supervisory body of the Swiss capital market (FINMA) and the central bank is intended to “strengthen” this banking group, which is considered systemically important, or otherwise too big to be allowed to fail.

It is the first time that the granting of such liquidity to a major bank on a global scale has been announced since the banking crisis of 2008, however, central banks had intervened to guarantee that financial institutions would withstand the pressure during the pandemic of the new coronavirus.

In the early hours of this morning, Crédit Suisse announced it would borrow up to 50 billion Swiss francs (€50.6 billion) from the central bank.

“The additional liquidity will support the core activities of Crédit Suisse and its customers as Crédit Suisse takes the necessary steps to create a simpler and more targeted bank based on the needs of its customers,” Switzerland’s second-largest bank said. in a press release he published.

When the stock market closed yesterday, the bank had a market capitalization of 6.7 billion Swiss francs (6.8 billion euros), a pittance for one of 30 banks around the world considered systemically important, or otherwise too big to fail.

The collapse of Silicon Valley Bank and smaller banks in the US triggered a crisis of confidence, which has now spread to Europe. Investors appeared to defy assurances, especially from US President Joe Biden, of measures to guarantee the stability of the financial system, US and international.

Unprecedented decline

FINMA and the Swiss central bank they also want to reassure, to convince that there is no danger of contagion of the turmoil in the American banking sector to the Swiss.

Earlier yesterday, senior executives at Crédit Suisse had already tried to calm concerns about the bank’s stability, but failed to convince investors: its stock suffered its biggest drop in its history.

The managing director of the bank, Ulrich Koerner, in an interview with the Channel News Asia television network, assured yesterday that “we are a strong bank, we are a bank with a global dimension under Swiss supervision” and “we fulfill and exceed all the requirements of the supervisory bodies”, “the capital our liquidity base is very strong.”

The concern went beyond the borders of the Alpine country, with the US Treasury Department announcing that it is “monitoring the situation” and “is in contact” with authorities “internationally”.

While in France, Prime Minister Elisabeth Borne called on Swiss authorities to resolve Crédit Suisse’s problems and instructed her finance minister to hold talks with his counterpart in Bern.

The dizzying fall began after statements by the president of the National Bank of Saudi Arabia, the largest shareholder of Crédit Suisse.

The Saudis entered the bank’s capital in November. But the National Bank of Saudi Arabia does not plan to inject new liquidity into Crédit Suisse, mainly for regulatory reasons, Ammar al-Hudayri, its chairman, said yesterday.

Saudi National Bank owns 9.8% of Crédit Suisse. However, under Swiss law, a green light is needed from FINMA, the Swiss supervisory body, to exceed the 10% limit.

In an interview with the Reuters news agency, Mr. al-Hudayri said he was “very satisfied” with the restructuring program of Crédit Suisse, which he described as a “very solid bank.”

“Totally another dimension”

This particular bank, founded in 1856, is a pillar of the Swiss financial sector, but is facing problems after the collapse of the British financial company Greensill, the trigger of a series of scandals that have put it in a difficult position. Since March 2021, Crédit Suisse stock has lost 83% of its value.

“The pressure on Crédit Suisse affected the already nervous market,” commented a Robobank analyst yesterday. Investors seem “increasingly worried” about banks, argued a Finalto analyst.

But, according to the latter, if Crédit Suisse ends up facing “an existential problem, we will be facing a completely different dimension”.

“It’s really too important to let sink,” he explained: its size has nothing to do with SVB’s.