Now the condition of Credit Suisse is also bad, will borrow $ 54 billion from Swiss Bank

Credit Suisse plans to borrow 50 billion Swiss francs (up to $54 billion) from the Swiss National Bank. Credit Suisse is going to use this option to try to deal with the cash crunch.

Now the condition of Credit Suisse is also bad, will borrow $ 54 billion from Swiss Bank

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Credit Suisse Crisis: Credit Suisse Group’s long-standing troubles turned into a bigger crisis on Wednesday as its stock and bonds took a sharp tumble. Due to this, the condition of Credit Suisse has also worsened. Now credit Suisse Has decided to take a loan of 54 billion dollars (about Rs 44,68,36,50,00,00) from Swiss Bank. Credit Suisse said on Thursday that it would try to deal with the cash crunch by exercising this option of the Swiss National Bank.

Swiss regulators took this unprecedented step after Credit Suisse’s shares fell by up to 30 percent on Wednesday. Swiss regulators have promised to provide cash to Credit Suisse on behalf of the central bank within an unspecified limit. Credit Suisse says that this borrowing will be taken under a secured loan facility and to meet the short-term cash requirement. In lieu of this, good quality assets will be kept on mortgage.

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Switzerland’s financial regulator FINMA and the central bank announced these important steps to allay the fears of investors associated with Credit Suisse. A joint statement said that this method has been implemented for the capital and cash requirement of important banks connected to the country’s system. If banks need it, they can borrow cash from the central bank.

First bank to get lifeline after 2008

Last week, the news of the sinking of Silicon Valley Bank and then Signature Bank in America has created fear of economic crisis among the people. In such a situation, Credit Suisse has become the first global bank to receive cash assistance from the central bank after the 2008 financial crisis.

Credit Suisse has welcomed this initiative of the Swiss National Bank and FINMA. Although central banks provided more cash to banks to reduce the stress related to the market at the time of corono virus epidemic.

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Banking sector crisis reached Europe from America

After the sinking of SVB and Signature Bank, there is turmoil in the stock markets around the world. This has also affected the stock of Credit Suisse. US President Joe Biden has also given many assurances to maintain the confidence of investors. Also said that emergency steps should be taken to give more money to the banks. The focus of the banking crisis shifted from the United States to Europe by Wednesday.

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Banking shares fell by up to 7%

The effect of this upheaval in Credit Suisse was visible on the European stock market. This led to a decline of up to 7 percent in the European Banking Index.