Swiss Bank Collapse | Credit Suisse: Adani moment for Credit Suisse? Swiss bank’s collapse triggers Twitter trolling


Switzerland-based global investment bank Credit Suisse was at the receiving end of the jibes of Twitteratis after the company’s long-brewing troubles exploded into a full-blown crisis on Wednesday. The Twitteratis drew a parallel with the Adani Group fiasco calling it “KARMA”.

Following the Hindenburg report on the Adani Group, Credit Suisse said it stopped accepting bonds as collateral for margin loans of some of the group entities of Adani Group. The companies in question were Adani Ports & Special Economic Zones, Adani Green Energy and Adani Electricity Mumbai.

“Adani moment for so many banks. Credit Suisse was the best. Played it’s part in that hitjob. Now, seems to have got hit by a killer punch,” Shyam Sekhar tweeted.

“Credit Suisse says won’t accept Adani bonds as collateral and now just in 45 days… Any one won’t accept CREDIT SUISSE….??????
KARMA,” a tweet posted by one Pranav Shah said.

“Karma?? Credit Suisse which was first to assign Zero Lending Value to Adani Group Bonds following Hindenburg allegations and supported the hit job, is in Deep trouble. #CreditSuisse ‘s biggest backer, Saudi National Bank, has said We cannot increase stake because we cannot go above 10%. It’s a regulatory issue. Shares down 24%. Credit Suisse posted a loss of $1.5 billion in Q4 and the stock is down 97% in 5 years with a 40% probability of default,” Twitter handle @MeghUpdates said in another tweet.

On Wednesday, the stock and bonds of Credit Suisse Group AG cratered and some of the world’s biggest banks raced to shield their finances from the potential fallout, Bloomberg reported.

The stock fell as much as 31%, hitting record lows, and prices on its benchmark bonds sank to levels that indicate the Swiss lender is in deep financial stress something rarely, if ever seen at a major global bank since the throes of the 2008 crisis, the report further said.

Meanwhile, banks that trade with Credit Suisse snapped up contracts, known as credit-default swaps, that will compensate them if the crisis deepens, the report added.

Crisis-hit Credit Suisse, which is struggling to regain market confidence after its stock plunged 31% on Wednesday amid doubts over its financial stability, is the 12th largest foreign bank in India and owns assets worth Rs 20,700 crore.

Even in the worst-case scenario of an SVB-like collapse, Credit Suisse is not being seen as a direct threat in India as it owns just 0.1% of assets in the Indian banking system.

However, the Swiss banking giant has a presence in the derivatives market and funds 60% of its assets from borrowings, of which 96% is up to two months, according to a study by Jefferies.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)



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