Credit Suisse collapses again in the stock market while a merger with UBS cools | Economy | The USA Print

Credit Suisse has become radioactive material. First it was the Saudi National Bank (SNB), its main shareholder – it owns 9.88% of the firm -, which this week refused to put even one more franc on the table to grow its capital. Now it is UBS, the largest Swiss bank, which rejects any type of merger with the second largest entity in the country and its great rival, due to the enormous risks that this would entail, according to Bloomberg. Credit Suisse shares lose 11% mid-session after having started the day positively, dragging down the main European indices, which have also turned red.

Years of sharp declines in the stock market have left the price of Credit Suisse at rock bottom. Especially after the brutal setback this week, where almost a third of its value has vanished, and its capitalization is around 7,000 million euros. Despite this, it does not seem that the sector considers it a bargain. The succession of scandals, fines and bad decisions have led him to write down heavy losses in his business, request more resources in capital increases and reduce his size through layoffs, and in the banking industry it is feared that he keeps more dead in the closet yet to go out

In this context, UBS refuses to participate in a concentration operation that in the midst of the US regional banking crisis, and when doubts spread over the entire sector, could bring more headaches than joy. Nor does it need to take that risk to grow: the reputational damage that Credit Suisse is suffering is causing a transfer of clients to UBS without the latter having to lift a finger, although a worsening of its rival’s crisis could also penalize it for its effects on the banking system, and above all for the credibility of Swiss entities.

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Credit Suisse received historic support from the Swiss National Bank on Thursday, from which it will borrow up to 50,000 million euros. The injection will allow you to repurchase debt for which you paid higher interest and therefore save good money, but although it gives you some air in the short term, it does not solve your problems. To raise a bank in low hours sometimes requires much more than providing liquidity, but the intangible of trust is more difficult to buy. Sometimes impossible.

In addition, the bank has seen how new fronts are opened. A group of US investors has filed a class action lawsuit in federal court in Camden, New Jersey, accusing him of deception for failing to disclose that he suffered a significant loss of customers and that he had material deficiencies in his internal controls over financial reporting. . And the rescue operation with funds provided by the Swiss National Bank does not generate a full consensus in the country. The left criticizes the fact that public resources are delivered so quickly to an entity that for years has fattened the checking accounts of its managers with succulent bonuses, generously rewarded despite having led the bank to its most delicate moment since its founding in 1856.

In the financial area of ​​Zurich, the economic capital of the Swiss country, there is no talk of anything else. All the headlines reflect the Credit Suisse crisis, and a discreet glance at the next table at the Zeughauskeller restaurant, for traditional food and craft beers, located very close to the bank’s headquarters, corroborates the growing concern. On the cell phones of some of the suited diners taking a lunch break, the name Credit Suisse appears between German terms, as Zurich is part of German-speaking Switzerland. Every day new relevant information emerges about the future of the bank, where many Swiss keep their savings, and bankers, investors and clients feverishly follow the news that advances almost as fast as its shares collapse.

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